<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
------------------------
SCHEDULE 13D
(Rule 13d-101)
INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT TO
RULE 13d-1(a) AND AMENDMENTS THERETO FILED PURSUANT TO
RULE 13d-2(a)
NIMBUS CD INTERNATIONAL, INC.
(Name of Issuer)
COMMON STOCK, PAR VALUE $.01 PER SHARE
(Title of Class of Securities)
65439010
(CUSIP Number)
David Abdoo
Company Secretary
Carlton Communications Plc
25 Knightsbridge
London SW1X 7RZ England
(Name, Address and Telephone Number of Person Authorized to Receive Notices and
Communications)
------------------------
copy to:
David M. Kies
Sullivan & Cromwell
125 Broad Street
New York, New York 10004
(212) 558-4000
---------------------
June 16, 1998
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to
report the acquisition that is the subject of this Schedule 13D, and is filing
this schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the
following box / /.
<PAGE>
SCHEDULE 13D
CUSIP No. 65439010
--------
- -------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Carlton Communications Plc
- -------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) / /
(b) / /
- -------------------------------------------------------------------------------
3 SEC USE ONLY
- -------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
WC, OO
- -------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) OR 2(e) / /
- -------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
England
- -------------------------------------------------------------------------------
7 SOLE VOTING POWER
0
---------------------------------------------------------------
NUMBER OF 8 SHARED VOTING POWER
SHARES
BENEFICIALLY 9,373,322
OWNED BY ---------------------------------------------------------------
EACH 9 SOLE DISPOSITIVE POWER
REPORTING
PERSON 0
WITH ---------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
9,373,322
- -------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
9,373,322
- -------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* / /
- -------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
43.7%
- -------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
CO
- -------------------------------------------------------------------------------
2
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SCHEDULE 13D
CUSIP No. 65439010
--------
- -------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Neptune Acquisition Corp.
- -------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) / /
(b) / /
- -------------------------------------------------------------------------------
3 SEC USE ONLY
- -------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
AF
- -------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) OR 2(e) / /
- -------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
- -------------------------------------------------------------------------------
7 SOLE VOTING POWER
0
---------------------------------------------------------------
NUMBER OF 8 SHARED VOTING POWER
SHARES
BENEFICIALLY 9,373,322
OWNED BY ---------------------------------------------------------------
EACH 9 SOLE DISPOSITIVE POWER
REPORTING
PERSON 0
WITH ---------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
9,373,322
- -------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
9,373,322
- -------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* / /
- -------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
43.7%
- -------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
CO
- -------------------------------------------------------------------------------
3
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Item 1. SECURITY AND ISSUER.
The name of the subject company is Nimbus CD International, Inc., a Delaware
corporation (the "Company"), and the address of its principal executive offices
is located at 623 Welsh Run Road, Guildford Farm, Ruckersville, Virginia 22968.
The Class of the securities to which this statement relates is the Common Stock,
par value $.01 per share (the "Shares"), of the Company.
Item 2. IDENTITY AND BACKGROUND.
(a)-(c); (f) Neptune Acquisition Corp., is a Delaware corporation
("Purchaser") and, except as described below, to date has not engaged in any
material activities other than those incident to its formation and the
commencement of the Offer (as defined below). Purchaser is a wholly owned
subsidiary of Carlton Communications Plc, an English public limited company
("Parent"). The principal offices of Purchaser are located at Brandywine
Corporate Center Naamans Road, Suite 117, Claymont, Delaware 19703.
Parent is an English public limited company. Parent's principal executive
offices are located at 25 Knightsbridge, London SW1X 7RZ. Parent is principally
involved in television broadcasting and program production and in production and
manufacturing activities for the video, feature film and television industries.
The business is carried out primarily by Parent's wholly owned subsidiaries in
the United Kingdom ("U.K."), the United States ("U.S.") and Continental Europe.
These subsidiaries form a grouping of complimentary activities within the
televison and screen-based entertainment industry, particularly in the world's
major markets of the U.S. and Europe.
The information set forth in Annex A hereto is incorporated by reference
herein.
(d)-(e) During the last five years, neither the Purchaser nor the Parent,
and to the best of Purchaser's and Parent's knowledge, none of the directors and
executive officers of the Purchaser or the Parent set forth on Annex A has been
convicted in a criminal proceeding of a judicial or administrative body of
competent jurisdiction as a result of which any such person was or is subject to
a judgment, decree or final order enjoining future violations of, or prohibiting
activities subject to, federal or state securities laws or finding any violation
of such law.
Item 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
Purchaser will obtain the necessary funds to consummate the Offer and the
Merger (as defined below) from Parent, either directly and indirectly, via
other wholly owned subsidiaries, through loans, advances or capital
contributions. It is currently anticipated that such funds will be generated
internally by Parent and its subsidiaries and/or obtained
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through borrowings, or from a combination of such sources. No final decisions
have been made, however, concerning the method Parent will employ to obtain
such funds.
Item 4. PURPOSE OF TRANSACTION.
Pursuant to an Agreement and Plan of Merger (the "Merger Agreement"),
dated as of June 16, 1998, by and among the Company, Parent and Purchaser,
pursuant to which, Purchaser is commencing an offer (the "Offer") to purchase
all outstanding Shares of the Company and, upon the terms and subject to the
conditions of the Merger Agreement, after completion of the Offer, Purchaser
will be merged with and into the Company (the "Merger") and each issued and
outstanding Share (other than (i) any Shares which are held by any subsidiary
of the Company or in the treasury of the Company, or which are held, directly
or indirectly, by Parent or any direct or indirect subsidiary of Parent
(including Purchaser), all of which shall be canceled and none of which shall
receive any payment with respect thereto and (ii) Shares held by holders of
Shares who comply with all the provisions of Delaware law concerning the
right of holders of Shares to dissent from the Merger and require appraisal
of their Shares (the "Dissenting Stockholders")) shall, by virtue of the
Merger and without any action on the part of the holder thereof, be converted
into and represent the right to receive an amount in cash, without interest,
equal to the price paid for each Share pursuant to the Offer (the "Merger
Consideration"). The purpose of the Offer is to acquire for cash as many
outstanding Shares as possible as a first step in acquiring the entire equity
interest in the Company. As a result of the Merger, the Company (sometimes
referred to herein as the "Surviving Corporation") will become a wholly owned
subsidiary of Parent. The summary of the terms and conditions of the Merger
Agreement contained herein is qualified in its entirety by reference to the
Merger Agreement, a copy of which is attached hereto as Exhibit 99(b) and is
incorporated by reference herein.
Simultaneously with entering into the Merger Agreement, Behrman Capital
L.P., Behrman Capital "B" L.P., Strategic Entrepreneur Fund, L.P., McCown De
Leeuw & Co. III, L.P., McCown De Leeuw & Co. (Europe) III, L.P., McCown De
Leeuw & Co. (Asia) III, L.P., Gamma Fund LLC, Lyndon J. Faulkner, President
and Chief Executive Officer of the Company and L. Steven Minkel, Executive
Vice President and Chief Financial Officer of the Company (the "Selling
Stockholders"), entered into a stockholders agreement, dated as of June 16,
1998 (the "Stockholders Agreement") with Parent and Purchaser, pursuant to
which the Selling Stockholders have agreed, among other things, (i) to
validly tender and sell into the Offer all such Shares which are owned of
record or beneficially by such Selling Stockholders prior to the Expiration
Date (as hereinafter defined) and vote such Shares in favor of the Merger,
and (ii) that, upon certain sales or other transfers or dispositions by a
Selling Stockholder of its Shares, such Selling Stockholder will pay to
Purchaser an amount in cash equal to the product of the number of Shares
transferred and the positive difference between the consideration per Share
paid in such sale or other transfer or disposition and $11.50, in each case
upon the terms and subject to conditions set forth in the Stockholders
Agreement. The summary of the terms and conditions of the Stockholders
Agreement contained herein is qualified in its entirety by reference to the
Stockholders Agreement, a copy of which is attached hereto as Exhibit 99(a)
and is incorporated by reference herein.
Each Selling Stockholder has agreed to, as promptly as practicable (and in
no event later than the tenth day (or if such day is not a business day, the
next succeeding business day immediately thereafter) after commencement of the
Offer), to validly tender (and not to withdraw) pursuant to and in accordance
with the terms of the Offer (provided that the Offer is not amended in a manner
prohibited by the Merger Agreement), in a timely manner for acceptance by
Purchaser,
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the number of Shares set forth opposite such Stockholder's name on
Schedule A to the Stockholders Agreement (the "Existing Shares").
Each Selling Stockholder has also agreed that if (i) at any time prior to
the expiration or termination of the Offer, (A) any Person shall have become
the beneficial owner of 50% or more of the outstanding Shares or (B) any
Person makes or publicly announces an intention to make an Acquisition
Proposal (as defined in the Merger Agreement) or (C) the Company enters into
an agreement with any Person with respect to an Acquisition Proposal and (ii)
at any time (x) in the case of (A) within one year thereafter, (y) in the
case of (B), within the period ending on the thirtieth day after the
withdrawal of such Acquisition Proposal, unless such Person or any of its
affiliates shall have entered into an Agreement with the Company or any one
or more Selling Stockholders or their respective affiliates regarding an
Acquisition Proposal or have publicly announced a new or amended Acquisition
Proposal (in which event the termination of such period shall be tolled) and
(z) in the case of (C), within the period ending on the thirtieth day after
the termination of such agreement, unless such Person or any of its
affiliates shall have entered into a new or amended agreement with the
Company or any one or more Selling Stockholders or their respective
affiliates regarding an Acquisition Proposal or have made or publicly
announce an intention to make an Acquisition Proposal (in which event the
termination of such period shall be tolled), such Selling Stockholder sells
or otherwise transfers or disposes of any of such Selling Stockholder's
Existing Shares or any other Shares of which such Selling Stockholder becomes
the owner prior to the date of such sale or other transfer or disposition of
any Shares that such Selling Stockholder currently has the right to acquire
then, such Selling Stockholder shall, as promptly as practicable (but in any
event within two business days after the later of the date of such sale or
other transfer or disposition, provided, that, if the fair market value of
any portion of the consideration is subject to the alternative process for
determination of its fair market value set forth in the Stockholders
Agreement, the payment relating to such portion of the consideration shall be
made no later than two business days after the date of agreement or such
determination) pay to Purchaser (or its designee) by wire transfer of
immediately available funds an amount in cash equal to the product of (i) the
number of such Shares so sold or otherwise transferred and (ii) the positive
difference between the value of the consideration per Share paid pursuant to
such sale or other transfer or disposition (as determined pursuant to the
terms of the Stockholders Agreement) and $11.50.
Each Selling Stockholder has agreed that prior to the termination of the
Stockholders Agreement such Selling Stockholder shall not (i) except as
contemplated by the Offer or the Stockholders Agreement, directly or
indirectly, offer for sale, sell, transfer, tender, pledge, encumber, assign
or otherwise dispose of, or enter into any contract, option or other
arrangement or understanding with respect to or consent to the offer for
sale, transfer, tender, pledge, encumbrance, assignment or other disposition
of, any or all of such Stockholder's Shares or any interest therein; (ii)
grant any proxies or powers of attorney, deposit any Shares into a voting
trust or enter into a voting agreement with respect to any Shares; or (iii)
take any action that would make any representation or warranty of such
Stockholder contained in the Stockholders Agreement untrue or incorrect or
have the effect of preventing or disabling such Stockholder from performing
such Stockholder's obligations under the Stockholders Agreement. Such
Stockholder has further agreed that such Stockholder shall not request that
the Company register the transfer (book-entry or otherwise)
6
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of any certificate or uncertificated interest representing any of
such Stockholder's Shares, unless such transfer is made to Purchaser in
compliance with the Offer or the Stockholders Agreement.
Each Selling Stockholder has agreed that until the first to occur of (i)
the Effective Time (as hereinafter defined) and (ii) the termination of the
Stockholders Agreement pursuant to Section 8 thereof, at any meeting of the
holders of Shares, however called, or in connection with any written consent
of the holders of Shares, such Stockholder shall vote (or cause to be voted)
the Shares owned by such Stockholder (i) in favor of the Merger and each of
the other actions contemplated by the Merger Agreement and the Stockholders
Agreement and any actions required in furtherance thereof; (ii) against any
action or agreement that would result in a breach in any respect of any
covenant, representation or warranty or any other obligation or agreement of
the Company under the Merger Agreement or of such Stockholder under the
Stockholders Agreement; and (iii) except as otherwise agreed to in writing in
advance by Parent, against the following actions (other than the Merger and
the transactions contemplated by the Merger Agreement): (A) any extraordinary
corporate transaction, such as a merger, consolidation or other business
combination involving the Company or its subsidiaries; (B) a sale, lease or
transfer of a material amount of assets of the Company or its subsidiaries,
or a reorganization, recapitalization, dissolution or liquidation of the
Company or its subsidiaries; or (C) (1) any change in a majority of the
persons who constitute the board of directors of the Company; (2) any change
in the present capitalization of the Company or any amendment of the
Company's corporate structure or business; or (4) any other action involving
the Company or its subsidiaries which is intended, or could reasonably be
expected, to prevent, impede, interfere with, delay, postpone, or materially
adversely affect the Offer, the Merger or the consummation of the
transactions contemplated by the Stockholders Agreement and the Merger
Agreement. No Stockholder shall enter into any agreement or understanding
with any Person or entity the effect of which would be to violate the
provisions and agreements contained in Section 3 of the Stockholders
Agreement.
The Merger Agreement provides that, promptly upon the acceptance for payment
of, and payment by Purchaser in accordance with the Offer for, any Shares
pursuant to the Offer, Purchaser shall be entitled to designate such number of
directors on the Board of Directors of the Company, rounded up to the next whole
number, as will give Purchaser, subject to compliance with Section 14(f) of the
Exchange Act, representation on such Board of Directors equal to at least that
number of directors which equals the product of the total number of directors on
the Board of Directors (giving effect to the directors elected pursuant to this
sentence) multiplied by a fraction, the numerator of which shall be the number
of Shares so accepted for payment and paid for or otherwise acquired or owned by
Purchaser or Parent and the denominator of which shall be the number of Shares
then issued and outstanding, and the Company and its Board of Directors shall,
at such time, take any and all such action needed to cause Purchaser's designees
to be appointed to the Company's Board of Directors (including to cause
directors to resign). Subject to applicable law, the Company shall take all
action requested by Parent which is reasonably necessary to effect any such
election, including mailing to its stockholders the Information Statement
containing the information required by Section 14(f) of the Exchange Act and
Rule 14f-1 promulgated thereunder,
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and the Company has agreed to make such mailing with the mailing of the
Schedule 14D-9, so long as Purchaser shall have provided to the Company on a
timely basis all information required to be included in the Information
Statement with respect to Purchaser's designees. In furtherance thereof, the
Company will increase the size of the Company's Board of Directors, or use
its reasonable efforts to secure the resignation of directors, or both, as is
necessary to permit Purchaser's designees to be elected to the Company's
Board of Directors.
The purchase of Shares by Purchaser pursuant to the Offer will reduce the
number of Shares that might otherwise trade publicly and may reduce the number
of holders of Shares, which could adversely affect the liquidity and market
value of the remaining Shares held by the public.
The Shares are listed on the Nasdaq National Market. According to
published guidelines of the Nasdaq National Market, the Shares might no
longer be eligible for quotation on the Nasdaq National Market if, among
other things, either (i) the number of Shares publicly held was less than
750,000, there were fewer than 400 holders of round lots, the aggregate
market value of publicly held Shares was less than $5,000,000, net tangible
assets was less than $4,000,000 and there were fewer than two registered and
active market makers for the Shares, or (ii) the number of Shares publicly
held was less than 1,100,000, there were fewer than 400 holders of round
lots, the aggregate market value of publicly held Shares was less than
$15,000,000, and either (x) the Company's market capitalization was less than
$50,000,000 or (y) the total assets and total revenue of the Company for the
most recently completed fiscal year or two of the last three most recently
completed fiscal years did not exceed $50,000,000 and there were fewer than
four registered and active market makers. Shares held directly or indirectly
by directors, officers or beneficial owners of more than 10% of the Shares
are not considered as being publicly held for this purpose. According to the
Company as of June 15, 1998, there were 21,469,754 Shares outstanding held by
288 holders (not including beneficial holders in street name).
If the Shares were to cease to be quoted on the Nasdaq National Market,
the market for the Shares could be adversely affected. It is possible that
the Shares would be traded or quoted on other securities exchanges or in the
over-the-counter market, and that price quotations would be reported by such
exchanges or through the National Association of Securities Dealers Automated
Quotation system, Inc. ("Nasdaq"). The extent of the public market for the
Shares and the availability of such quotations would, however, depend upon
the number of stockholders and/or the aggregate market value of the Shares
remaining at such time, the interest in maintaining a market in the Shares on
the part of securities firms, the possible termination of registration of the
Shares under the Exchange Act and other factors.
The Shares are currently registered under the Exchange Act. Such
registration may be terminated by the Company upon application to the SEC if the
outstanding Shares are not listed on a national securities exchange and if there
are fewer than 300 holders of record of Shares.
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Except as set forth in this Schedule 13D, none of the Reporting Persons, and
to the knowledge of each of the Reporting Persons, none of the persons listed on
Schedule I hereto, has any present plans or intentions which would result in or
relate to any of the actions described in subparagraphs (a) through (j) of Item
4 of the form of Statement on Schedule 13D promulgated under the Exchange Act.
Purchaser and Parent intend to evaluate continuously their investment in the
Company and, based on such evaluation, may determine at a future date to adopt
plans or intentions different from those set forth herein.
Item 5. INTERESTS IN SECURITIES OF THE ISSUER.
(a)-(c) Except as set forth herein and in the responses to Items 7, 8, 9
and 10 cover pages attached hereto (which are hereby incorporated by
reference herein), neither Purchaser nor Parent, nor, to the best of their
knowledge, any of the persons listed in Schedule A hereto, beneficially owns
or has a right to acquire any Shares of the Company. Neither Purchaser nor
Parent, nor, to the best of their knowledge, any of the persons or entities
referred to above, has effected any transaction in Shares during the past 60
days.
Subject to the terms and conditions of the Stockholders Agreement, the
Selling Stockholders have the right to receive and the power to direct the
receipt of dividends from, or the proceeds from the sale of the Shares to
which the Stockholders Agreement relates.
Item 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR
RELATIONSHIPS WITH RESPECT TO SECURITIES OF THE ISSUER.
Except as set forth in this Schedule 13D, neither Purchaser nor Parent, nor,
to the best of their knowledge, any of the persons listed in Schedule A hereto,
has any contract, arrangement,
9
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understanding or relationship with any other person with respect to any
securities of the Company, including, but not limited to, any contract,
arrangement, understanding or relationship concerning the transfer or the
voting of any such securities, joint ventures, loan or option arrangements,
puts or calls, guaranties of loans, guaranties against loss or the giving or
withholding of proxies.
Item 7. MATERIAL TO BE FILED AS EXHIBITS.
99(a) Agreement, dated as of June 16, 1998 among Parent, Purchaser and the
Selling Stockholders.
99(b) Agreement and Plan of Merger, dated as of June 16, 1998, among the
Company, Parent and Purchaser.
99(c) Filing Agreement, dated June 23, 1998 between Parent and Purchaser.
10
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SIGNATURES
After due inquiry and to the best of my knowledge and belief, I certify
that the information set forth in this statement is true, complete and
correct.
Date: June 23, 1998
CARLTON COMMUNICATIONS PLC
By: /s/ David Abdoo
-----------------------------------------
Name: David Abdoo
Title: Company Secretary
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SIGNATURES
After due inquiry and to the best of my knowledge and belief, I certify that
the information set forth in this statement is true, complete and correct.
Date: June 23, 1998
NEPTUNE ACQUISITION CORP.
By: /s/ Thomas M. Collins, Jr.
-----------------------------------------
Name: Thomas M. Collins, Jr.
Title: Vice President and Secretary
12
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ANNEX A
DIRECTORS AND EXECUTIVE OFFICERS OF NEPTUNE ACQUISITION CORP.
<TABLE>
<CAPTION>
PRESENT PRINCIPAL OCCUPATION
OR EMPLOYMENT AND FIVE-YEAR
NAME AND BUSINESS ADDRESS OFFICE(S) EMPLOYMENT HISTORY CITIZENSHIP
- ------------------------------------ ------------------ ------------------------------------ ----------------
<S> <C> <C> <C>
ORLANDO F. RAIMONDO................. President; Chief President of various wholly owned United States
3233 East Mission Oaks Executive Officer; subsidiaries of Parent comprising
Boulevard Director the Technicolor Packaged Media Group
Camarillo, CA 93012
GARY JOYCE.......................... Vice President; Senior Vice President and Chief United Kingdom
3233 East Mission Oaks Treasurer; Financial Officer of Technicolor
Boulevard Assistant Packaged Media Group since July
Camarillo, CA 93012 Secretary; 1996. Prior to that time, Divisional
Director Controller of Carlton
THOMAS M. COLLINS, JR............... Vice President; Senior Vice President and General United States
3233 East Mission Oaks Secretary; Counsel of Technicolor Packaged
Boulevard Assistant Media Group; executive officer of
Camarillo, CA 93012 Treasurer; a wholly owned subsidiary of Parent
Director is 1993. Partner, Thelin, Marrin,
Johnson & Bridges, prior to July
1993.
</TABLE>
<TABLE>
<CAPTION>
PRESENT PRINCIPAL OCCUPATION
OR EMPLOYMENT AND FIVE-YEAR
NAME AND BUSINESS ADDRESS OFFICE(S) EMPLOYMENT HISTORY CITIZENSHIP
- ------------------------------------ ------------------ ------------------------------------ ----------------
<S> <C> <C> <C>
MICHAEL P. GREEN.................... Chairman Chairman of Carlton since February United Kingdom
25 Knightsbridge 1983. Chairman of British Digital
London SWIX 7RZ Broadcasting PLC and a non-executive
England Director of ITN Limited and Reuters
Holdings Plc. Chairman of the Media
Trust.
</TABLE>
13
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<TABLE>
<CAPTION>
PRESENT PRINCIPAL OCCUPATION
OR EMPLOYMENT AND FIVE-YEAR
NAME AND BUSINESS ADDRESS OFFICE(S) EMPLOYMENT HISTORY CITIZENSHIP
- ------------------------------------ ------------------ ------------------------------------ ----------------
<S> <C> <C> <C>
SIR DEREK BIRKIN.................... Director Director of Carlton since June 1992. United Kingdom
25 Knightsbridge Non-executive Director of Merck &
London SWIX 7RZ Co., Inc., Watmoughs (Holdings) PLC
England and The Merchants Trust PLC.
Advisory Director of Unilever PLC.
BERNARD A. CRAGG.................... Finance Director; Finance Director of Carlton since United Kingdom
25 Knightsbridge Chief Financial June 1987. Joined Carlton in 1985
London SWIX 7RZ Officer as Group Financial Controller.
England
ANTHONY D.A.W. FORBES............... Director Non-executive Director of Carlton United Kingdom
since July 1994. Joint senior
partner at Cazenove & Co. from 1980
until 1994. Non-executive director
of Royal & Sun Alliance Insurance
Group plc, Watmoughs (Holdings PLC
and The Merchants Trust PLC.
DAVID B. GREEN...................... Director Non-executive Director of Carlton United Kingdom
since November 1990. Chairman of
Colefax and Fowler Group PLC.
LESLIE F. HILL...................... Director Non-executive Director of Carlton United Kingdom
since January 1996. Chief Executive
and then Chairman of Central
Independent Television PLC from
March 1991 to December 1995.
Chairman of the ITV Association.
SIR SYDNEY LIPWORTH, QC............. Director Non-executive Director of Carlton United Kingdom
since November 1993. Chairman of
Zeneca Group PLC, Deputy Chairman of
National Westminister Bank Plc and
Chairman of the Financial Reporting
Council. Previously Chairman of the
Monopolies and Mergers Commission
</TABLE>
14
<PAGE>
<TABLE>
PRESENT PRINCIPAL OCCUPATION
OR EMPLOYMENT AND FIVE-YEAR
NAME AND BUSINESS ADDRESS OFFICE(S) EMPLOYMENT HISTORY CITIZENSHIP
- ------------------------------------ ------------------ ------------------------------------ ----------------
<S> <C> <C> <C>
JUNE F. DE MOLLER................... Managing Director Managing Director of Carlton since United Kingdom
July 1993. Director since February
1983. Non-executive Director of
Anglian Water Plc.
SIR BRIAN PITMAN.................... Director Non-executive Director of Carlton United Kingdom
since March 1, 1998. Chairman of
Lloyds TSB Group plc and Lloyds B
plc. Director of the National Bank
of New Zealand Limited and NBNZ
Holdings Limited. Non-executive
Director of Next plc and President
of the Chartered Institute of
Bankers.
NIGEL N. WALMSLEY................... Director Joined the Board of Carlton in United Kingdom
October 1991. Appointed Chairman of
Carlton Television Limited in May
1994. Director of British Digital
Broadcasting PLC. Non-executive
Director of GMTV Limited and Energis
PLC and Vice President of the
Advertising Association.
THE HON. PIERS J.H. INSKIP.......... Associate Joined Carlton in 1989 and appointed United Kingdom
Director1 an associate Director in 1990.
MATTHEW J. KEARNEY.................. Associate Director Joined Carlton in 1993; appointed an United Kingdom
associate Director in 1996.
DAVID ABDOO......................... Secretary Joined Carlton in 1988; appointed United Kingdom
Company Secretary in 1991.
</TABLE>
- ------------------------
* This title indicates a senior officer position immediately below that of
Executive Director.
15
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AGREEMENT
AGREEMENT dated as of June 16, 1998, among Carlton
Communications Plc, a company organized under the laws of England ("Parent"),
Neptune Acquisition Corp., a Delaware corporation and a wholly owned subsidiary
of Parent ("Sub"), and the other parties signatory hereto (each a "Stockholder"
and collectively, the "Stockholders").
W I T N E S S E T H :
WHEREAS, contemporaneously herewith, Parent, Sub and Nimbus CD
International, Inc., a Delaware corporation (the "Company"), have entered into
an Agreement and Plan of Merger (as such agreement may hereafter be amended from
time to time, the "Merger Agreement"; capitalized terms used and not defined
herein have the respective meanings ascribed to them in the Merger Agreement),
pursuant to and subject to the conditions of which Sub will, as soon as
practicable (and not later than five business days) after the execution and
delivery of the Merger Agreement, commence an offer to purchase all of the
issued and outstanding shares of Company Common Stock (the "Offer") and Sub will
be merged with and into the Company (the "Merger"); and
WHEREAS, as an inducement and a condition to entering into the
Merger Agreement, Parent and Sub have required that the Stockholders agree, and
the Stockholders have each agreed, to enter into this Agreement;
NOW, THEREFORE, in consideration of the foregoing and the
mutual premises, representations, warranties, covenants and agreements contained
herein, the parties hereto, intending to be legally bound, hereby agree as
follows:
1. Definitions. For purposes of this Agreement:
(a) "Company Common Stock" shall mean at any time the common
stock, $0.01 par value, of the Company.
(b) "Person" shall mean an individual, corporation,
partnership, joint venture, association, trust, unincorporated organization or
other entity.
2. Tender of Shares.
(a) Each Stockholder hereby agrees to, as promptly as
practicable (and in no event later than the tenth day (or if such day is not a
business day, the next succeeding business day immediately thereafter) after
commencement of the Offer), validly tender (and not to withdraw) pursuant to and
in accordance with the terms of the Offer (provided that the Offer is not
amended in a manner prohibited by the Merger Agreement), in a timely manner for
acceptance by Sub in the Offer, the number of shares of Company Common Stock set
-1-
<PAGE>
forth opposite such Stockholder's name on Schedule I hereto (the "Existing
Shares" and, together with any shares of Company Common Stock acquired by such
Stockholder after the date hereof and prior to the termination of this Agreement
whether upon the exercise of options, warrants or rights, the conversion or
exchange of convertible or exchangeable securities, or by means of purchase,
dividend, distribution or otherwise and acquired by such Stockholder solely in
its capacity as a stockholder, the "Shares"), owned by such Stockholder. Each
Stockholder hereby acknowledges and agrees that Sub's obligation to accept for
payment and pay for Company Common Stock in the Offer, including the Shares, is
subject to the terms and conditions of the Offer.
(b) Each Stockholder agrees that if (i) at any time prior to
the expiration or termination of the Offer, (A) any Person shall have become the
beneficial owner of 50% or more of the outstanding shares of Common Stock or (B)
any Person makes or publicly announces an intention to make an Acquisition
Proposal or (C) the Company enters into an agreement with any Person with
respect to an Acquisition Proposal and (ii) at any time (x) in the case of (A)
within one year thereafter, (y) in the case of (B), within the period ending on
the thirtieth day after the withdrawal of such Acquisition Proposal, unless such
Person or any of its affiliates shall have entered into an Agreement with the
Company or any one or more Stockholders or their respective affiliates regarding
an Acquisition Proposal or have publicly announced a new or amended Acquisition
Proposal (in which event the termination of such period shall be tolled) and (z)
in the case of (C), within the period ending on the thirtieth day after the
termination of such agreement, unless such Person or any of its affiliates shall
have entered into a new or amended agreement with the Company or any one or more
Stockholders or their respective affiliates regarding an Acquisition Proposal or
have made or publicly announce an intention to make an Acquisition Proposal (in
which event the termination of such period shall be tolled), such Stockholder
sells or otherwise transfers or disposes of any of such Stockholder's Existing
Shares or any other shares of Common Stock of which such Stockholder becomes the
owner prior to the date of such sale or other transfer or disposition or any
shares of Common Stock that such Stockholder currently has the right to acquire
then, such Stockholder shall, as promptly as practicable (but in any event
within two business days after the later of the date of such sale or other
transfer or disposition, provided, that, if the fair market value of any portion
of the consideration is subject to the process for determination of its fair
market value set forth below, the payment relating to such portion of the
consideration shall be made no later than two business days after the date of
agreement or such determination) pay to Sub (or its designee) by wire transfer
of immediately available funds an amount in cash equal to the product of (i) the
number of such shares of Common Stock so sold or otherwise transferred and (ii)
the positive difference between value of the consideration per share of Common
Stock paid pursuant to such sale or other transfer or disposition and $11.50.
For purposes of the foregoing, the parties agree that the value of the
consideration per share of Common Stock paid pursuant to such sale or other
transfer or disposition shall be deemed to include the value of any dividends or
other distributions of any kind whatsoever (including, by means of stock
dividend, cash dividend,
-2-
<PAGE>
stock split, recapitalization, combination, reorganization, exchange of shares
of Common Stock or otherwise) received or distributable in respect of such
shares of Common Stock held on or prior to the date of such sale or other
transfer or disposition and that no Stockholder shall sell, distribute or
otherwise transfer (including by means of liquidation) such shares of Common
Stock to any of its limited partners, general partners, family members or other
affiliates unless such transferee first agrees in writing for the benefit of Sub
and Parent (in form reasonably satisfactory to Sub and Parent) that such
transferee agrees to be bound by the provisions of this Agreement. For purposes
of determining the value of the consideration paid per share of Common Stock and
the value of any distributions with respect to shares of Common Stock, the
parties agree that (i) the value of any part of such consideration or
distribution paid in cash shall be such cash value and (ii) any part of such
consideration or distribution paid in securities or other property shall be
valued at the fair market value of such securities or other property as of the
date of such sale or other transfer or disposition. For purposes of the
preceding clause (ii), the parties agree that the fair market value of
securities or other property shall be determined as follows: (A) if such
securities or other property are publicly traded, the fair market value of such
securities or other property shall be the average of the high and low sales
prices of such securities or other property as publicly reported by or for the
principal exchange or other market on which such securities or other property
are traded on the date of such sale or other transfer or disposition and (B) if
such securities or other property are not publicly traded and the parties cannot
otherwise agree on their fair market value within two business days after the
sale or other transfer or disposition, by averaging the fair market values of
such securities or other property as determined within five business days after
such sale or other transfer or disposition by two internationally recognized
investment banking firms, one chosen by Sub and one chosen by the Stockholders
(acting together); provided, however, that if such investment banking firms
shall fail to make such determinations within such time period or the fair
market values of such securities or other property as of the date of such sale
or other transfer or disposition as determined by such investment banking firms
differ by more than 10% of the lower of the two values, such determination
(which shall be final and binding on all parties hereto) shall be made witin 10
business days after the sale or other transfer or disposition by a third
internationally recognized investment banking firm chosen by the other two
investment banking firms. The parties agree to use reasonable best efforts to
ensure the prompt payment, and if necessary, the prompt determination of the
fair market value of any securities or other property pursuant to this
paragraph, it being understood and agreed that, without limiting the generality
of the foregoing, it is the intent of the parties that Sub, and not the
Stockholders, should receive the value of the consideration in excess of
$11.50 from any sale or other transfer or disposition of the shares of Common
Stock subject to this Agreement as a result of any change in control or
agreement relating to or public announcement of the making of or an intention
to make an Acquisition Proposal prior to the date the Offer is terminated or
otherwise expires. For purposes of this Agreement, an Acquisition Proposal
shall be deemed to include an acquisition (or series of acquisitions) by the
Company pursuant to which the Company issues shares of Common Stock
constituting, in the aggregate, more than the
-3-
<PAGE>
number of issued and outstanding shares of Common Stock as of the date of this
Agreement and, in such circumstances, the value of the consideration received
for the shares of Common Stock subject to this paragraph shall be the fair
market value of such shares of Common Stock as of the date of any such
acquisitions by the Company.
(c) Each Stockholder hereby agrees to permit Parent and Sub to
publish and disclose in the Offer Documents and, if approval of the stockholders
of the Company is required under applicable law, the Proxy Statement (including
all documents and schedules filed with the SEC) its identity and ownership of
Company Common Stock and the nature of its commitments, arrangements and
understandings under this Agreement.
3. Provisions Concerning Company Common Stock. Each
Stockholder hereby agrees that during the period commencing on the date hereof
and continuing until the first to occur of (i) the Effective Time and (ii) the
termination of this Agreement pursuant to Section 8 hereof at any meeting of the
holders of Company Common Stock, however called, or in connection with any
written consent of the holders of Company Common Stock, such Stockholder shall
vote (or cause to be voted) the Shares owned by such Stockholder whether issued,
heretofore owned or hereafter acquired, (i) in favor of the Merger and each of
the other actions contemplated by the Merger Agreement and this Agreement and
any actions required in furtherance thereof and hereof; (ii) against any action
or agreement that would result in a breach in any respect of any covenant,
representation or warranty or any other obligation or agreement of the Company
under the Merger Agreement or of such Stockholder under this Agreement; and
(iii) except as otherwise agreed to in writing in advance by Parent, against the
following actions (other than the Merger and the transactions contemplated by
the Merger Agreement): (A) any extraordinary corporate transaction, such as a
merger, consolidation or other business combination involving the Company or its
subsidiaries; (B) a sale, lease or transfer of a material amount of assets of
the Company or its subsidiaries, or a reorganization, recapitalization,
dissolution or liquidation of the Company or its subsidiaries; or (C) (1) any
change in a majority of the persons who constitute the board of directors of the
Company; (2) any change in the present capitalization of the Company or any
amendment of Company's Certificate of Incorporation or By-laws; (3) any other
material change in the Company's corporate structure or business; or (4) any
other action involving the Company or its subsidiaries which is intended, or
could reasonably be expected, to prevent, impede, interfere with, delay,
postpone, or materially adversely affect the Offer, the Merger or the
consummation of the transactions contemplated by this Agreement and the Merger
Agreement. No Stockholder shall enter into any agreement or understanding with
any Person or entity the effect of which would be to violate the provisions and
agreements contained in this Section 3.
4. Representations and Warranties of the Stockholders. Each
Stockholder, as to itself, hereby severally represents and warrants to Sub and
Parent as follows:
-4-
<PAGE>
(a) Legal Status. If such Stockholder is a corporation,
partnership or other similar business entity, such Stockholder is a duly
organized and validly existing corporation, partnership or other similar
business entity, as the case may be, in good standing under the laws of its
jurisdiction of organization.
(b) Ownership of Shares. Such Stockholder is the record and
beneficial owner of the number of Shares set forth opposite such Stockholder's
name on Schedule I hereto. On the date hereof, the Existing Shares set forth
opposite such Stockholder's name on Schedule I hereto constitute all of the
Shares owned by such Stockholder. Except as set forth on Schedule I, such
Stockholder has sole voting power and sole power to issue instructions with
respect to the matters set forth in Sections 2 and 3 hereof, sole power of
disposition, sole power of conversion, sole power to demand appraisal rights and
sole power to agree to all of the matters set forth in this Agreement, in each
case with respect to all of the Existing Shares set forth opposite such
Stockholder's name on Schedule I hereto, with no limitations, qualifications or
restrictions on such rights, subject to applicable securities laws and the terms
of this Agreement. Other than this Agreement and the Merger Agreement, there is
no option, warrant, right, call, proxy, agreement, commitment or understanding
of any nature whatsoever, fixed or contingent, that directly or indirectly (i)
calls for the sale, pledge or other transfer or disposition of any of the
Existing Shares, any interest therein or any rights with respect thereto, or
related to the voting, disposition or control of the Existing Shares, or (ii)
obligates such Shareholder to grant, offer or enter into any of the foregoing.
(c) Power; Binding Agreement. Such Stockholder has the legal
capacity, power and authority to execute, deliver and enter into this Agreement,
comply with all of terms and provisions of this Agreement, perform all of such
Stockholder's obligations under this Agreement and consummate all of the
transactions involving such Stockholder contemplated by this Agreement and has
taken all necessary corporate or other action necessary to authorize the
execution, delivery and performance by such Stockholder of this Agreement and
the consummation of the transactions contemplated hereby. The execution,
delivery and performance of this Agreement by such Stockholder will not violate
any other agreement to which such Stockholder is a party including, without
limitation, any voting agreement, stockholders agreement or voting trust. This
Agreement has been duly and validly authorized (if such Stockholder is a
corporation, partnership or other similar business entity), executed and
delivered by such Stockholder and constitutes a valid and binding agreement of
such Stockholder, enforceable against such Stockholder in accordance with its
terms, except as such enforcement may be limited by bankruptcy, insolvency and
other similar laws affecting creditors' rights generally or by general
principles of equity. There is no other person whose consent is required for the
execution, delivery and performance of this Agreement or the consummation by
such Stockholder of the transactions contemplated hereby whose unconditional and
irrevocable consent has not heretofore been obtained.
-5-
<PAGE>
(d) No Conflicts. Except for the required filings and the
expiration or earlier termination of the required waiting period under the HSR
Act, (A) No filing with, and no permit, authorization, consent or approval of,
any state or federal public body or authority is necessary for the execution of
this Agreement by such Stockholder and the consummation by such Stockholder of
the transactions contemplated hereby and (B) none of the execution and delivery
of this Agreement by such Stockholder, the consummation by such Stockholder of
the transactions contemplated hereby or compliance by such Stockholder with any
of the provisions hereof shall (1) if such Stockholder is a corporation,
partnership or other similar business entity, conflict with or violate the
certificate of incorporation, bylaws, partnership agreement or other
organizational documents or instruments of such Stockholder, as the case may be,
(2) conflict with or result in a violation or breach of, or constitute (with or
without notice or lapse of time or both) a default (or give rise to any third
party right of termination, cancellation, material modification or acceleration)
under any of the terms, conditions or provisions of any note, bond, mortgage,
indenture, license, contract, commitment, arrangement, understanding, agreement
or other instrument or obligation of any kind to which such Stockholder is a
party or by which such Stockholder or any of its properties or assets may be
bound, (3) violate any order, writ, injunction, decree, judgment, order,
statute, rule or regulation applicable to such Stockholder or to which any of
its properties or assets are subject or (4) result in the creation of any
claims, liens, restrictions, security interests, pledges, limitations and
encumbrances of any kind.
(e) No Encumbrances. Such Stockholder's Shares and the
certificates representing such Shares are now, and at all times during the term
hereof will be, held by such Stockholder, or by a nominee or custodian for the
benefit of such Stockholder, free and clear of all liens, claims, security
interests, proxies, voting trusts or agreements, understandings or arrangements
or any other encumbrances of any kind whatsoever, except for any such
encumbrances or proxies arising hereunder. The transfer by such Stockholder of
its Shares to Sub in the Offer or otherwise pursuant to this Agreement shall
pass to and unconditionally vest in Sub good and valid title to all Shares, free
and clear of all claims, liens, restrictions, security interests, pledges,
limitations and encumbrances of any kind whatsoever.
(f) Broker's or Finder's Fees. No agent, broker, person or
firm acting on behalf of such Stockholder or any of its Affiliates (other than
the Company) is, or will be, entitled to any commission or broker's or finder's
fees from any Person other than such Stockholder or its Affiliates (other than
the Company) in connection with any of the sale of its Shares as contemplated by
this Agreement.
(g) Offer Documents and Schedule 14D-9. None of the
information supplied by such Stockholder for inclusion or incorporation by
reference in the Offer Documents, the Company's Schedule 14D-9, at the
respective times the Offer Documents or the Company's Schedule 14D-9 are filed
with the SEC and the date they are first
-6-
<PAGE>
published, sent or given to the holders of Common Stock, will contain any untrue
statement of a material fact or omit to state any material fact necessary in
order to make the statements made, in light of the circumstances under which
they are made, not misleading. Such Stockholder agrees promptly to correct any
information provided by it for use in the Offer Documents, or the Company's
Schedule 14D-9 that shall be, or shall have become, false or misleading in any
material respect.
(h) Reliance by Parent. Such Stockholder understands and
acknowledges that Sub and Parent are each entering into the Merger Agreement in
reliance upon such Stockholder's execution and delivery of this Agreement.
5. Covenants of the Stockholders. Each Stockholder covenants
and agrees as follows:
(a) Restriction on Transfer, Proxies and Non-Interference.
Beginning on the date hereof and ending on the date this Agreement shall
terminate pursuant to Section 8 hereof, such Stockholder shall not (i) except as
contemplated by the Offer or this Agreement, directly or indirectly, offer for
sale, sell, transfer, tender, pledge, encumber, assign or otherwise dispose of,
or enter into any contract, option or other arrangement or understanding with
respect to or consent to the offer for sale, transfer, tender, pledge,
encumbrance, assignment or other disposition of, any or all of such
Stockholder's Shares or any interest therein; (ii) grant any proxies or powers
of attorney, deposit any Shares into a voting trust or enter into a voting
agreement with respect to any Shares; or (iii) take any action that would make
any representation or warranty of such Stockholder contained herein untrue or
incorrect or have the effect of preventing or disabling such Stockholder from
performing such Stockholder's obligations under this Agreement.
(b) Waiver of Appraisal Rights. Such Stockholder hereby
irrevocably waives any rights of appraisal or rights to dissent from the Merger
that such Stockholder may have.
(c) Stop Transfer; Changes in Shares. Such Stockholder agrees
with, and covenants to, Parent and Sub that such Stockholder shall not request
that the Company register the transfer (book-entry or otherwise) of any
certificate or uncertificated interest representing any of such Stockholder's
Shares, unless such transfer is made to Sub in compliance with the Offer or this
Agreement. In the event of a stock dividend or distribution, or any change in
the capital stock of the Company by reason of any stock dividend, split-up,
recapitalization, combination, exchange of shares or the like, the term "Shares"
shall be deemed to refer to and include the Shares as well as all such stock
dividends and distributions and any shares into which or for which any or all of
the Shares may be changed or exchanged and the purchase price per Share shall be
appropriately adjusted. Such Stockholder shall be entitled to receive any cash
dividend paid by the
-7-
<PAGE>
Company during the term of this Agreement until its Shares are purchased in the
Offer or hereunder.
(d) Exclusive Dealing. (a) Such Stockholder and each of its
officers, directors, employees, representatives, consultants, investment banker,
attorneys, accountants, agents or advisors (collectively "Agents") shall
immediately cease any discussions or negotiations with any other parties that
may be ongoing with respect to any purchase of such Stockholder's Shares or any
Acquisition Proposal (as defined below). Such Stockholder shall not, directly or
indirectly, take (and no Stockholder shall authorize or permit its Agents to so
take) any action to (i) encourage, solicit or initiate the making of any offer
to purchase such Stockholder's Shares or any Acquisition Proposal, (ii) enter
into any agreement with respect to any offer to purchase such Stockholder's
Shares or any Acquisition Proposal, or (iii) participate in any way in
discussions or negotiations with, or furnish or disclose any information to, any
Person (other than Parent or Sub) in connection with, or take any other action
to facilitate any inquiries or the making of any proposal that constitutes, or
may reasonably be expected to lead to, any offer to purchase such Stockholder's
Shares or any Acquisition Proposal.
6. Fiduciary Duties. Notwithstanding anything in this
Agreement to the contrary, the covenants and agreements set forth herein shall
not require any Stockholder, acting in his capacity as an officer or director of
the Company, to breach his fiduciary duties as a director of the Company to the
Company and its stockholders.
7. Miscellaneous.
(a) Further Assurances. From time to time, at the other
party's request and without further consideration, each of the parties hereto
shall execute and deliver such additional documents and take all such further
lawful action as may be necessary or desirable to consummate and make effective,
in the most expeditious manner practicable, the transactions contemplated by
this Agreement.
(b) Entire Agreement. This Agreement and the Merger Agreement
constitute the entire agreement between the parties with respect to the subject
matter hereof and supersedes all other prior agreements and understandings, both
written and oral, between the parties with respect to the subject matter hereof.
(c) Certain Events. Each Stockholder agrees that this
Agreement and the obligations hereunder shall attach to such Stockholder's
Shares and shall be binding upon any person or entity to which legal or
beneficial ownership of such Shares shall pass, whether by operation of law or
otherwise, including, without limitation, such Stockholder's heirs, guardians,
administrators or successors. Notwithstanding any transfer of Shares, the
-8-
<PAGE>
transferor shall remain liable for the performance of all obligations under this
Agreement of the transferor.
(d) Assignment. This Agreement shall not be assigned by
operation of law or otherwise without the prior written consent of the other
party provided that Parent and Sub may assign, at their respective sole
discretion, their respective rights and obligations hereunder to any direct or
indirect wholly-owned subsidiary of Parent, although no such assignment shall
relieve Parent or Sub of their respective obligations hereunder if such assignee
does not perform such obligations and provided further that, in the event of a
Stockholder's death or incapacity, such Stockholder's rights hereunder shall
inure to his heirs, guardians, administrators or successors.
(e) Amendments, Waivers, Etc. This Agreement may not be
amended, changed, supplemented, waived or otherwise modified or terminated,
except upon the execution and delivery of a written agreement executed by the
relevant parties (e.g., Parent, Sub and, any one or more Stockholders with
respect to the respective rights and obligations as among Parent, Sub and such
Stockholders under this Agreement).
(f) Notices. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be given (and shall be
deemed to have been duly received if so given) by hand delivery, telegram, telex
or telecopy, or by mail (registered or certified mail, postage prepaid, return
receipt requested) or by any courier service, such as Federal Express, providing
proof of delivery. All communications hereunder shall be delivered to the
respective parties at the following addresses:
If to a Stockholder: At the address set forth on Schedule I hereto
copy to: White & Case LLP
1155 Avenue of the Americas
New York, New York 10036
Attention: William F. Wynne, Jr.
If to Parent:
Carlton Communications Plc
25 Knightsbridge
London SW1X 7RZ England
Attention: David Abdoo
-9-
<PAGE>
copy to: Sullivan & Cromwell
125 Broad Street
New York, New York 10004
Attention: David M. Kies
If to Sub:
Neptune Acquisition Corp.
3233 East Mission Oaks Blvd.
Camarillo, California 93012
Attention: Thomas Collins
copy to: Sullivan & Cromwell
125 Broad Street
New York, New York 10004
Attention: David M. Kies
or to such other address as the person to whom notice is given may have
previously furnished to the others in writing in the manner set forth above.
(g) Severability. Whenever possible, each provision or portion
of any provision of this Agreement will be interpreted in such manner as to be
effective and valid under applicable law but if any provision or portion of any
provision of this Agreement is held to be invalid, illegal or unenforceable in
any respect under any applicable law or rule in any jurisdiction, such
invalidity, illegality or unenforceability will not affect any other provision
or portion of any provision in such jurisdiction, and this Agreement will be
reformed, construed and enforced in such jurisdiction as if such invalid,
illegal or unenforceable provision or portion of any provision had never been
contained herein.
(h) Specific Performance. Each of the parties hereto
recognizes and acknowledges that a breach by it of any covenants or agreements
contained in this Agreement will cause the other party to sustain damages for
which it would not have an adequate remedy at law for money damages, and
therefore each of the parties hereto agrees that in the event of any such breach
the aggrieved party shall be entitled to the remedy of specific performance of
such covenants and agreements and injunctive and other equitable relief in
addition to any other remedy to which it may be entitled, at law or in equity.
(i) Remedies Cumulative. All rights, powers and remedies
provided under this Agreement or otherwise available in respect hereof at law or
in equity shall be
-10-
<PAGE>
cumulative and not alternative, and the exercise of any thereof by any party
shall not preclude the simultaneous or later exercise of any other such right,
power or remedy by such party.
(j) No Waiver. The failure of any party hereto to exercise any
right, power or remedy provided under this Agreement or otherwise available in
respect hereof at law or in equity, or to insist upon compliance by any other
party hereto with its obligations hereunder, and any custom or practice of the
parties at variance with the terms hereof shall not constitute a waiver by such
party of its right to exercise any such or other right, power or remedy or to
demand such compliance.
(k) No Third Party Beneficiaries. This Agreement is not
intended to be for the benefit of, and shall not be enforceable by, any person
or entity who or which is not a party hereto.
(l) Governing Law. This Agreement shall be governed and
construed in accordance with the laws of the State of Delaware, without giving
effect to the principles of conflicts of law thereof.
(m) Jurisdiction. Each party hereby irrevocably submits to the
exclusive jurisdiction of the United States District Court for the Southern
District of New York or any court of the State of New York located in the City
of New York in any action, suit or proceeding arising in connection with this
Agreement, and agrees that any such action, suit or proceeding shall be brought
only in such court (and waives any objection based on forum non conveniens or
any other objection to venue therein); provided, however, that such consent to
jurisdiction is solely for the purpose referred to in this paragraph (m) and
shall not be deemed to be a general submission to the jurisdiction of said
Courts or in the State of New York other than for such purposes. EACH PARTY
HERETO HEREBY WAIVES ANY RIGHT TO A TRIAL BY JURY IN CONNECTION WITH ANY SUCH
ACTION, SUIT OR PROCEEDING.
(n) Descriptive Headings. The descriptive headings used herein
are inserted for convenience of reference only and are not intended to be part
of or to affect the meaning or interpretation of this Agreement.
(o) Counterparts. This Agreement may be executed in
counterparts, each of which shall be deemed to be an original, but all of which,
taken together, shall constitute one and the same Agreement.
8. Termination. This Agreement (other than Section 2(b) and
Sections 7 and 8 which shall survive termination of this Agreement until any
amounts due and payable by any Stockholder pursuant to Section 2(b) have been
paid) shall terminate upon the termination of the Merger Agreement pursuant to
Article VI thereof and thereafter no party
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<PAGE>
shall have any rights or obligations hereunder and this Agreement shall become
null and void and have no effect except that nothing in this Section 8 shall
relieve any party of liability for a breach of this Agreement.
[SIGNATURE PAGE FOLLOWS]
-12-
<PAGE>
IN WITNESS WHEREOF, each of Parent, Sub and the Stockholders
has caused this Agreement to be duly executed as of the day and year first above
written.
CARLTON COMMUNICATIONS PLC
By:
--------------------------------------
Name:
Title:
NEPTUNE ACQUISITION CORP.
By:
--------------------------------------
Name:
Title:
-13-
<PAGE>
STOCKHOLDERS
<TABLE>
<CAPTION>
Name of Stockholder Number of Existing Shares
- ------------------- -------------------------
<S> <C>
BEHRMAN CAPITAL L.P. 3,306,037
By: Behrman Brothers L.P., general partner
By:
-------------------------------
Darryl Behrman, general partner
BEHRMAN CAPITAL "B" L.P. 298,278
By: Behrman Brothers L.P., general partner
By:
-------------------------------
Darryl Behrman, general partner
STRATEGIC ENTREPRENEUR FUND, L.P. 65,751
By:
---------------------------------------
Darryl Behrman, general partner
----------
Subtotal 3,670,066
</TABLE>
The address of the foregoing Stockholders is 126 E.56th Street, New
York, New York 10022, Attention: Darryl Behrman.
(LIST OF STOCKHOLDERS CONTINUED ON NEXT PAGE)
-14-
<PAGE>
STOCKHOLDERS (cont.)
<TABLE>
<CAPTION>
Name of Stockholder Number of Existing Shares
- ------------------- -------------------------
<S> <C>
McCOWN DE LEEUW & CO. III, L.P. 4,478,412
By: MDC Management Company III, L.P., general partner
By:
------------------------------
Charles Ayres, general partner
McCOWN DE LEEUW & CO. (Europe) III, L.P. 774,046
By: MDC Management Company IIIA, L.P., general partner
By:
------------------------------
Charles Ayres, general partner
McCOWN DE LEEUW & CO. (Asia) III, L.P. 82,931
By: MDC Management Company IIIA, L.P., general partner
By:
------------------------------
Charles Ayres, general partner
GAMMA FUND LLC 193,512
By:
----------------------------------
Charles Ayres, member
-----------
Subtotal 5,528,901
</TABLE>
The address of each of the foregoing Stockholders is 101 East 52nd
Street, New York, New York 10022. Attention Charles Ayres.
<TABLE>
<CAPTION>
<S> <C>
- -------------------------------------- 0
Lyndon J. Faulkner
- -------------------------------------- 174,355
L. Steven Minkel
\
The address of each of the foregoing Stockholders is Nimbus CD International Inc.,
623 Welsh Run Road, Guildford Farm, Ruckersville, Virginia 22968
---------
TOTAL SHARES 9,373,322
---------
</TABLE>
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AGREEMENT AND PLAN OF MERGER
BY AND AMONG
CARLTON COMMUNICATIONS PLC
NEPTUNE ACQUISITION CORP.
AND
NIMBUS CD INTERNATIONAL, INC.
Dated as of June 16, 1998
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AGREEMENT AND PLAN OF MERGER
TABLE OF CONTENTS
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ARTICLE I
THE OFFER
1.01 The Offer.......................................................................................2
1.02 Company Actions.................................................................................3
1.03 Composition of the Board of Directors...........................................................4
ARTICLE II
THE MERGER AND RELATED MATTERS
2.01 The Merger......................................................................................5
2.02 Conversion of Stock.............................................................................6
2.03 Dissenting Stock................................................................................6
2.04 Surrender of Certificates.......................................................................7
2.05 Payment.........................................................................................8
2.06 No Further Rights of Transfers..................................................................8
2.07 Stock Option and Other Plans....................................................................9
2.08 Certificate of Incorporation of the Surviving Corporation......................................10
2.09 By-Laws of the Surviving Corporation...........................................................10
2.10 Directors and Officers of the Surviving Corporation............................................10
2.11 Closing........................................................................................10
ARTICLE III
REPRESENTATIONS AND WARRANTIES
3.01 Representations and Warranties of the Company..................................................10
(a) Due Organization, Good Standing and Corporate Power...................................10
(b) Authorization and Validity of Agreement...............................................11
(c) Capitalization........................................................................11
(d) Consents and Approvals; No Violations.................................................13
(e) Company Reports and Financial Statements..............................................13
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(f) Absence of Certain Changes............................................................14
(g) Title to Properties; Encumbrances.....................................................15
(h) Compliance with Laws..................................................................15
(i) Litigation............................................................................16
(j) Employee Benefit Plans................................................................16
(k) Taxes.................................................................................18
(l) Liabilities...........................................................................19
(m) Intellectual Properties...............................................................19
(n) Material Contracts....................................................................19
(o) Proxy Statement and Schedule l4D-9....................................................21
(p) Broker's or Finder's Fee..............................................................22
(q) Environmental Laws and Regulations....................................................22
(r) State Takeover Statutes; Charter Provisions...........................................24
(s) Opinion of Financial Advisor..........................................................24
(t) Rights Agreement......................................................................24
(u) Voting Requirements...................................................................24
3.02 Representations and Warranties of Parent and Sub...............................................25
(a) Due Organization; Good Standing and Corporate Power...................................25
(b) Authorization and Validity of Agreement...............................................25
(c) Consents and Approvals; No Violations.................................................25
(d) Offer Documents, Schedule l4D-9 and Proxy Statement...................................26
(e) Broker's or Finder's Fee..............................................................26
(f) Financing.............................................................................27
ARTICLE IV
TRANSACTIONS PRIOR TO CLOSING DATE
4.01 Access to Information Concerning Properties and Records........................................27
4.02 Confidentiality................................................................................27
4.03 Conduct of the Business of the Company Pending the Closing Date................................27
4.04 Proxy Statement................................................................................30
4.05 Stockholder Approval...........................................................................30
4.06 Reasonable Efforts.............................................................................30
4.07 No Solicitation of Other Offers................................................................31
4.08 Notification of Certain Matters................................................................33
4.09 HSR Act........................................................................................33
4.10 Employee Benefits..............................................................................33
4.11 Directors' and Officers' Insurance; Indemnification............................................34
4.12 Guaranty of Performance........................................................................35
4.13 Financing......................................................................................35
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ARTICLE V
CONDITIONS PRECEDENT TO MERGER
5.01 Conditions Precedent to Obligations of Parent, Sub and the Company.............................35
(a) Approval of Company's Stockholders....................................................35
(b) HSR Act...............................................................................35
(c) Injunction............................................................................35
(d) Statutes..............................................................................36
(e) Payment for Common Stock..............................................................36
ARTICLE VI
TERMINATION AND ABANDONMENT
6.01 Termination....................................................................................36
6.02 Effect of Termination..........................................................................38
ARTICLE VII
MISCELLANEOUS
7.01 Fees and Expenses..............................................................................39
7.02 Representations and Warranties.................................................................39
7.03 Extension; Waiver..............................................................................40
7.04 Public Announcements...........................................................................40
7.05 Notices........................................................................................40
7.06 Entire Agreement...............................................................................41
7.07 Binding Effect; Benefit; Assignment............................................................42
7.08 Amendment and Modification.....................................................................42
7.09 Further Actions................................................................................42
7.10 Headings.......................................................................................42
7.11 Counterparts...................................................................................42
7.12 Applicable Law; Jurisdiction...................................................................42
7.13 Severability...................................................................................43
7.14 Certain Definitions............................................................................43
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AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER, dated as of June 16, 1998 (this
"Agreement"), by and among Carlton Communications Plc, a company organized under
the laws of England ("Parent"), Neptune Acquisition Corp., a Delaware
corporation and a wholly-owned subsidiary of Parent ("Sub"), and Nimbus CD
International, Inc., a Delaware corporation (the "Company").
WHEREAS, the respective Boards of Directors of Parent, Sub and
the Company have approved and determined that it is in the best interests of
their respective companies and stockholders for Sub to acquire the Company;
WHEREAS, in contemplation thereof it is proposed that Sub will
make a tender offer (the "Offer") to purchase all the issued and outstanding
shares of common stock, $0.01 par value, of the Company ("Common Stock"), upon
the terms and subject to the conditions of this Agreement (including the
conditions set forth in Annex A hereto), at a price of 11.50 per share net to
the seller in cash (the "Offer Price");
WHEREAS, to complete such acquisition, the respective Boards
of Directors of Parent, Sub and the Company, have approved the merger of Sub
into the Company, with the Company being the surviving corporation (the
"Merger"), upon the terms and subject to the conditions of this Agreement;
WHEREAS, the Directors of the Company have unanimously
determined that each of the Offer and the Merger are fair to, and in the best
interests of, the holders of Common Stock, approved the Offer and the Merger and
recommended the acceptance of the Offer and approval and adoption of this
Agreement by the stockholders of the Company; and
WHEREAS, contemporaneously with the execution and delivery of
this Agreement, as a condition and inducement to Parent's and Sub's willingness
to enter into this Agreement, certain stockholders of the Company (the "Selling
Stockholders") are entering into an agreement with Parent and Sub (the
"Stockholder Agreement"), pursuant to which, and upon the terms and subject to
the conditions of which, the Selling Stockholders have agreed to tender (and not
to withdraw) all of the shares of Common Stock currently owned and hereafter
acquired by them pursuant to the Offer.
NOW, THEREFORE, in consideration of the premises and of the
mutual covenants, representations, warranties and agreements herein contained,
the parties hereto agree as follows:
<PAGE>
ARTICLE I
THE OFFER
1.01 The Offer. (a) Provided that this Agreement shall not
have been terminated in accordance with Article VI hereof and so long as none of
the events set forth in Annex A hereto (the "Tender Offer Conditions") shall
have occurred and are continuing, as promptly as practicable, but in no event
later than the fifth business day after the date of this Agreement, Sub shall
commence (within the meaning of Rule 14d-2 promulgated under the Securities
Exchange Act of 1934, as amended (the "Exchange Act")) the Offer. The
obligations of Sub to accept for payment and to pay for any shares of Common
Stock validly tendered and not withdrawn prior to the expiration of the Offer
shall be subject only to the Tender Offer Conditions, any of which may be waived
by Parent or Sub; provided, however, that neither Parent or Sub shall waive the
Minimum Condition (as defined in Annex A) without the prior written consent of
the Company. The Tender Offer Conditions are for the sole benefit of Parent and
Sub and may be asserted by Parent and Sub regardless of the circumstances giving
rise to any such Tender Offer Conditions and, subject to the immediately
preceding sentence, may be waived by Parent and Sub in whole or in part. Parent
and Sub expressly reserve the right to modify the terms of the Offer, including
without limitation to extend the Offer beyond any scheduled expiration date;
provided, however, without the consent of the Company, Sub shall not (i) reduce
the number of shares of Common Stock to be purchased in the Offer, (ii) reduce
the Offer Price, (iii) add to the Tender Offer Conditions or otherwise modify
the Tender Offer Conditions in a manner that is adverse to the holders of Common
Stock or (iv) change the form of consideration payable in the Offer. Parent and
Sub covenant and agree that, subject to the terms and conditions of this
Agreement, including, but not limited to, the Tender Offer Conditions, unless
the Company otherwise consents in writing, Sub will accept for payment and pay
for the Common Stock in accordance with Rule 14e-1(c) of the Exchange Act;
provided, however, that unless (i) any Person has made an Acquisition Proposal
(as hereinafter defined), or (ii) any of the conditions of the Offer set forth
in Annex A hereto shall not have been satisfied, the expiration date may not be
extended beyond the 10th business day after the initial expiration date of the
Offer without the Company's prior written consent, such consent not to be
unreasonably withheld (it being expressly understood and agreed that, if all of
the conditions set forth in Annex A hereto shall have been satisfied and no
Person has made an Acquisition Proposal, Sub shall have the right, in its sole
discretion, to extend the expiration date (through one or more extensions)
through the 10th business day after the initial expiration date).
(b) As soon as reasonably practicable (and no more than five
business days) after the date hereof, Parent and Sub shall file, and Parent, if
necessary, shall cause Sub to file, with the Securities and Exchange Commission
(the "Commission") a Tender Offer Statement on Schedule 14D-1 (together with all
amendments and supplements thereto, the "Schedule 14D-1") with respect to the
Offer. The Schedule 14D-1 shall contain (included
-2-
<PAGE>
as an exhibit) or shall incorporate by reference an offer to purchase (the
"Offer to Purchase") and a form of the related letter of transmittal (the
"Letter of Transmittal"), as well as all other information and exhibits required
by law (which Schedule 14D-1, Offer to Purchase, Letter of Transmittal and such
other information and exhibits, together with any supplements or amendments
thereto, are referred to herein collectively as the "Offer Documents"). The
Offer Documents will comply in all material respects with the provisions of
applicable federal securities laws and, on the date filed with the Commission
and the date first published, sent or given to the Company's stockholders, shall
not contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they are made, not
misleading, except that no representation is made by Parent or Sub with respect
to any information supplied by the Company in writing for inclusion in the
Schedule 14D-1 or derived from the Company's Commission Filings. Each of Parent
and Sub agrees promptly to correct any information provided by it for use in the
Offer Documents that shall be, or have become, false or misleading in any
material respect, and Parent and Sub further agree to take all steps necessary
to cause the Schedule 14D-1 as so corrected to be filed with the Commission and
the other Offer Documents as so corrected to be disseminated to holders of
Common Stock, in each case as and to the extent required by applicable federal
securities laws. Each of Parent and Sub agrees to provide the Company and its
counsel with copies (which shall be treated confidentially) of any written
comments Parent and Sub or their counsel may receive from the Commission or its
staff with respect to the Offer Documents promptly after the receipt of such
comments and shall, to extent practicable, provide the Company and its counsel
an opportunity to comment on the proposed response of Parent and Sub to such
comments.
1.02 Company Actions. The Company hereby approves of and
consents to the Offer and the Merger and represents that (a) its Board of
Directors (at a meeting duly called and held) has (i) determined by the
unanimous vote of the Directors that each of the Offer and the Merger is fair
to, and in the best interests of, the holders of Common Stock, (ii) approved the
Offer and the Merger and approved and adopted this Agreement in accordance with
the provisions of the General Corporation Law of the State of Delaware (the
"DGCL"), (iii) recommended the acceptance of the Offer and the approval and
adoption of this Agreement by the stockholders of the Company, (iv) taken all
other applicable action necessary to render Section 203 of the DGCL and all
other applicable state takeover statutes, if any, inapplicable to the Offer, the
Merger and the acquisition of shares of Common Stock by Sub pursuant to the
Stockholders Agreement and the actions contemplated hereby and thereby;
provided, however, that such recommendation may be withdrawn, modified or
amended at any time or from time to time if the Board of Directors of the
Company determines in its good faith judgment after consulting with independent
outside counsel to the Company, that failing to take such action would
constitute a breach of the Board's fiduciary obligations under applicable law;
and (b) Berenson Minella & Company ("Berenson Minella") has delivered to the
Board of Directors of the Company its opinion that the consideration per share
of Common Stock to be received by the holders of Common
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Stock (other than Parent and Sub) pursuant to the Offer and the Merger is fair
to the holders of Common Stock from a financial point of view, subject to the
assumptions and qualifications contained in such opinion. The Company shall file
with the Securities and Exchange Commission (the "Commission"), as soon as
practicable after the date of the commencement of the Offer, a
Solicitation/Recommendation Statement on Schedule 14D-9 (the "Schedule l4D-9")
containing the recommendations referred to in clause (a) of the preceding
sentence and shall disseminate the Schedule 14D-9 as required by Rule 14d-9
under the Exchange Act; provided, however, that such recommendation or other
action may be withdrawn, modified or amended at any time or from time to time if
the Board of Directors of the Company determines in its good faith judgment,
after consulting with independent outside counsel to the Company, that failing
to take such action would constitute a breach of the Board's fiduciary
obligations under applicable law. Parent and Sub and their counsel shall be
given the opportunity to review and comment upon the Schedule l4D-9 prior to its
filing with the Commission. The Schedule 14D-9 will comply in all material
respects with the provisions of applicable federal securities laws and, on the
date filed with the Commission and on the date first published, sent or given to
the Company's stockholders, shall not contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary in order to make the statements therein, in light of the circumstances
under which they were made, not misleading, except that no representation is
made by the Company with respect to information supplied by Parent or Sub in
writing for inclusion in the Schedule 14D-9. The Company agrees to provide
Parent and its counsel with any comments the Company or its counsel may receive
from the Commission or its staff with respect to the Schedule 14D-9 promptly
after the receipt of such comments and shall, to the extent practicable, provide
Parent and its counsel an opportunity to comment on the proposed response of the
Company to such comments.
In connection with the Offer, the Company will promptly
furnish Sub with mailing labels, security position listings and any available
listing or computer list containing the names and addresses of the record
holders of the Common Stock as of the most recent practicable date and shall
furnish Sub with such additional information (including, but not limited to,
updated lists of holders of Common Stock and their addresses, mailing labels and
lists of security positions) and such other assistance as Sub or its agents may
reasonably request in communicating the Offer to the Company's stockholders.
Subject to the requirements of applicable law, and except for such steps as are
necessary to disseminate the Offer Documents and any other documents necessary
to consummate the Merger, Parent, Sub and their respective affiliates,
associates, agents, and advisors, shall keep confidential and use the
information contained in any such labels, listings and files only in connection
with the Offer and the Merger and, if this Agreement shall be terminated, will
deliver to the Company all copies of such information then in their possession.
1.03 Composition of the Board of Directors. Promptly upon the
acceptance for payment of, and payment by Sub in accordance with the Offer for,
any shares of Common Stock pursuant to the Offer, Sub shall be entitled to
designate such number of directors on
-4-
<PAGE>
the Board of Directors of the Company, rounded up to the next whole number, as
will give Sub, subject to compliance with Section 14(f) of the Exchange Act,
representation on such Board of Directors equal to at least that number of
directors which equals the product of the total number of directors on the Board
of Directors (giving effect to the directors elected pursuant to this sentence)
multiplied by a fraction, the numerator of which shall be the number of shares
of Common Stock so accepted for payment and paid for or otherwise acquired or
owned by Sub or Parent and the denominator of which shall be the number of
shares of Common Stock then issued and outstanding, and the Company and its
Board of Directors shall, at such time, take any and all such action needed to
cause Sub's designees to be appointed to the Company's Board of Directors
(including to cause directors to resign). Subject to applicable law, the Company
shall take all action requested by Parent which is reasonably necessary to
effect any such election, including mailing to its stockholders the Information
Statement containing the information required by Section 14(f) of the Exchange
Act and Rule 14f-1 promulgated thereunder, and the Company agrees to make such
mailing with the mailing of the Schedule 14D-9, so long as Sub shall have
provided to the Company on a timely basis all information required to be
included in the Information Statement with respect to Sub's designees. In
furtherance thereof, the Company will increase the size of the Company's Board
of Directors, or use its reasonable efforts to secure the resignation of
directors, or both, as is necessary to permit Sub's designees to be elected to
the Company's Board of Directors.
ARTICLE II
THE MERGER AND RELATED MATTERS
2.01 The Merger. (a) Subject to the terms and conditions of
this Agreement, at the time of the Closing (as defined in Section 2.11 hereof),
a certificate of merger (the "Certificate of Merger") shall be duly prepared,
executed and acknowledged by Sub and the Company in accordance with the DGCL and
shall be filed on the Closing Date (as defined in Section 2.11 hereof). The
Merger shall become effective upon the filing of the Certificate of Merger with
the Secretary of State of the State of Delaware in accordance with the
provisions and requirements of the DGCL. The date and time when the Merger shall
become effective is hereinafter referred to as the "Effective Time."
(b) At the Effective Time, Sub shall be merged with and into
the Company and the separate corporate existence of Sub shall cease, and the
Company shall continue as the surviving corporation under the laws of the State
of Delaware (the "Surviving Corporation").
(c) From and after the Effective Time, the Merger shall have
the effects set forth in Section 259 of the DGCL.
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2.02 Conversion of Stock. At the Effective Time:
(a) Each share of Common Stock then issued and outstanding
(other than (i) any shares of Common Stock which are held by any
subsidiary of the Company or in the treasury of the Company, or which
are held, directly or indirectly, by Parent or any direct or indirect
subsidiary of Parent (including Sub), all of which shall be cancelled
and none of which shall receive any payment with respect thereto and
(ii) shares of Common Stock held by Dissenting Stockholders (as defined
in Section 2.03 hereof)) shall, by virtue of the Merger and without any
action on the part of the holder thereof, be converted into and
represent the right to receive an amount in cash, without interest,
equal to the price paid for each share of Common Stock pursuant to the
Offer (the "Merger Consideration"); and
(b) Each share of common stock, par value $0.01 per share, of
Sub then issued and outstanding shall, by virtue of the Merger and
without any action on the part of the holder thereof, become one fully
paid and nonassessable share of common stock, $0.01 par value, of the
Surviving Corporation.
2.03 Dissenting Stock. Notwithstanding anything in this
Agreement to the contrary but only to the extent required by the DGCL, shares of
Common Stock that are issued and outstanding immediately prior to the Effective
Time and are held by holders of Common Stock who comply with all the provisions
of Delaware law concerning the right of holders of Common Stock to dissent from
the Merger and require appraisal of their shares of Common Stock ("Dissenting
Stockholders") shall not be converted into the right to receive the Merger
Consideration but shall become the right to receive such consideration as may be
determined to be due such Dissenting Stockholder pursuant to the law of the
State of Delaware; provided, however, that (i) if any Dissenting Stockholder
shall subsequently deliver a written withdrawal of his or her demand for
appraisal (with the written approval of the Surviving Corporation, if such
withdrawal is not tendered within 60 days after the Effective Time), or (ii) if
any Dissenting Stockholder fails to establish and perfect his or her entitlement
to appraisal rights as provided by applicable law or (iii) if within 120 days of
the Effective Time neither any Dissenting Stockholder nor the Surviving
Corporation has filed a petition demanding a determination of the value of the
shares of Common Stock outstanding at the Effective Time and held by Dissenting
Stockholders, in accordance with applicable law, then such Dissenting
Stockholder or Stockholders, as the case may be, shall forfeit the right to
appraisal of such shares and such shares shall thereupon be deemed to have been
converted into the right to receive, as of the Effective Time, the Merger
Consideration, without interest. The Company shall give Parent and Sub (A)
prompt notice of any written demands for appraisal, withdrawals of demands for
appraisal and any other related instruments received by the Company, and (B) the
opportunity to direct all negotiations and proceedings with respect to demands
for appraisal. The Company will not voluntarily make any payment with respect to
any demands for appraisal and will not, except with the prior written consent of
Parent, settle or offer to settle any demand.
-6-
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2.04 Surrender of Certificates. (a) Concurrently with or prior
to the Effective Time, Parent shall designate a bank or trust company located in
the United States and reasonably acceptable to the Company to act as paying
agent (the "Paying Agent") for purposes of making the cash payments contemplated
hereby. As soon as practicable after the Effective Time, Sub shall (and if
necessary Parent shall cause Sub to) cause the Paying Agent to mail and/or make
available to each holder of a certificate theretofore evidencing shares of
Common Stock (other than those which are held by any subsidiary of the Company
or in the treasury of the Company or which are held directly or indirectly by
Parent or any direct or indirect subsidiary of Parent (including Sub)) a Letter
of Transmittal advising such holder of the effectiveness of the Merger and the
procedure for surrendering to the Paying Agent such certificate or certificates
which immediately prior to the Effective Time represented outstanding Common
Stock (the "Certificates") in exchange for the Merger Consideration deliverable
in respect thereof pursuant to this Article II. Upon the surrender for
cancellation to the Paying Agent of such Certificates, together with a Letter of
Transmittal, duly executed and completed in accordance with the instructions
thereon, and any other items specified by the Letter of Transmittal, the Paying
Agent shall promptly pay to the Person (as defined in Section 7.14 hereof)
entitled thereto the Merger Consideration deliverable in respect thereof. Until
so surrendered, each Certificate shall be deemed, for all corporate purposes, to
evidence only the right to receive upon such surrender the Merger Consideration
deliverable in respect thereof to which such Person is entitled pursuant to this
Article II. No interest shall be paid or accrued in respect of such cash
payments.
(b) If the Merger Consideration (or any portion thereof) is to
be delivered to a Person other than the Person in whose name the Certificates
surrendered in exchange therefor are registered, it shall be a condition to the
payment of the Merger Consideration that the Certificates so surrendered shall
be properly endorsed or accompanied by appropriate stock powers and otherwise in
proper form for transfer, that such transfer otherwise be proper and that the
Person requesting such transfer pay to the Paying Agent any transfer or other
taxes payable by reason of the foregoing or establish to the satisfaction of the
Paying Agent that such taxes have been paid or are not required to be paid.
(c) In the event any Certificate shall have been lost, stolen
or destroyed, upon the making of an affidavit of that fact by the Person
claiming such Certificate to be lost, stolen or destroyed, the Paying Agent will
issue in exchange for such lost, stolen or destroyed Certificate the Merger
Consideration deliverable in respect thereof as determined in accordance with
this Article II; provided that, the Person to whom the Merger Consideration is
paid shall, as a condition precedent to the payment thereof, give the Surviving
Corporation a bond in such sum as it may direct or otherwise indemnify the
Surviving Corporation in a manner satisfactory to it against any claim that may
be made against the Surviving Corporation with respect to the Certificate
claimed to have been lost, stolen or destroyed.
-7-
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2.05 Payment. Concurrently with or immediately prior to the
Effective Time, Sub or , if necessary, Parent shall deposit in trust with the
Paying Agent cash in United States dollars in an aggregate amount equal to the
product of (i) the number of shares of Common Stock outstanding immediately
prior to the Effective Time (other than shares of Common Stock which are held by
any subsidiary of the Company or in the treasury of the Company or which are
held directly or indirectly by Parent or any direct or indirect subsidiary of
Parent (including Sub) or a Person known at the time of such deposit to be a
Dissenting Stockholder) and (ii) the Merger Consideration (such amount being
hereinafter referred to as the "Payment Fund"). The Payment Fund shall be
invested by the Paying Agent as directed by Sub in direct obligations of the
United States, obligations for which the full faith and credit of the United
States is pledged to provide for the payment of principal and interest,
commercial paper rated of the highest quality by Moody's Investors Services,
Inc. or Standard & Poor's Ratings Group or certificates of deposit, bank
repurchase agreements or bankers' acceptances of a commercial bank having at
least $500,000,000 in assets (collectively "Permitted Investments") or in money
market funds which are invested in Permitted Investments, and any net earnings
with respect thereto shall be paid to Parent as and when requested by Parent.
The Paying Agent shall, pursuant to irrevocable instructions, make the payments
referred to in Section 2.02(a) hereof out of the Payment Fund. The Payment Fund
shall not be used for any other purpose except as otherwise agreed to by Parent.
Promptly following the date which is six months after the Effective Time, the
Paying Agent shall return to the Surviving Corporation all cash, certificates
and other instruments in its possession that constitute any portion of the
Payment Fund, and the Paying Agent's duties shall terminate. Thereafter, each
holder of a Certificate may surrender such Certificate to the Surviving
Corporation and (subject to applicable abandoned property, escheat and similar
laws) receive in exchange therefor the Merger Consideration, without interest,
but shall have no greater rights against the Surviving Corporation or Parent
than may be accorded to general creditors of the Surviving Corporation or Parent
under applicable law. Notwithstanding the foregoing, neither the Paying Agent
nor any party hereto shall be liable to a holder of shares of Common Stock for
any Merger Consideration delivered to a public official pursuant to applicable
abandoned property, escheat and similar laws.
2.06 No Further Rights of Transfers. At and after the
Effective Time, each holder of a Certificate shall cease to have any rights as a
stockholder of the Company, except for, in the case of a holder of a Certificate
(other than shares to be cancelled pursuant to Section 2.02(a) hereof and other
than shares held by Dissenting Stockholders), the right to surrender his or her
Certificate in exchange for payment of the Merger Consideration or, in the case
of a Dissenting Stockholder, to perfect his or her right to receive payment for
his or her shares pursuant to Delaware law if such holder has validly perfected
and not withdrawn his or her right to receive payment for his or her shares, and
no transfer of shares of Common Stock shall be made on the stock transfer books
of the Surviving Corporation. Certificates presented to the Surviving
Corporation after the Effective Time shall be cancelled and exchanged for cash
as provided in this Article II. At the close of business on the day of the
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Effective Time the stock ledger of the Company with respect to Common Stock
shall be closed.
2.07 Stock Option and Other Plans. Prior to the Effective
Time, the Board of Directors of the Company (or, if appropriate, any Committee
thereof) shall adopt appropriate resolutions and use its reasonable best efforts
to take all other actions necessary to (i) provide for the cancellation,
effective at the Effective Time of all the outstanding stock options and other
rights to purchase shares of Common Stock ("Options") and (ii) terminate, as of
the Effective Time, the Stock Option Plans and any other plan, program or
arrangement providing for the issuance or grant of any other interest in respect
of the capital stock of the Company or any of its subsidiaries (collectively,
the "Stock Incentive Plans") and (iii) amend, as of the Effective Time, the
provisions in any U.S. or Foreign Employee Benefit Plan providing for the
issuance, transfer or grant of any capital stock of the Company or any of its
subsidiaries or any interest in respect of any capital stock of the Company or
its subsidiaries to provide that there shall be no continuing rights to acquire,
hold, transfer or grant any capital stock of the company or its subsidiaries or
any interest in the capital stock of the Company or its subsidiaries.
Immediately prior to the Effective Time, the Company shall use its reasonable
best efforts to ensure that (i) each Option, whether or not then vested or
exercisable, shall no longer be exercisable for the purchase of shares of Common
Stock but shall entitle each holder thereof, in cancellation and settlement
therefor, to payments by the Company in cash (subject to any applicable
withholding taxes, the "Cash Payment"), at the Effective Time, equal to the
product of (x) the total number of shares of Common Stock subject to such Option
whether or not then vested or exercisable and (y) the excess of the Merger
Consideration over the exercise price per share of Common Stock subject to such
Option, each such Cash Payment to be paid to each holder of an outstanding
Option at the Effective Time and (ii) each share of Common Stock previously
issued in the form of grants of restricted stock or grants of contingent shares
shall fully vest in accordance with their respective terms. In addition, any
outstanding stock appreciation rights or limited stock appreciation rights shall
be cancelled immediately prior to the Effective Time without any payment or
other consideration therefor. As provided herein, the Company shall use its
reasonable best efforts to ensure that the Stock Incentive Plans shall terminate
as of the Effective Time. The Company will take all necessary steps to ensure
that neither the Company nor any of its subsidiaries is or will be bound by any
Options, other options, warrants, rights or agreements which would entitle any
Person, other than Parent or its affiliates, to own any capital stock of the
Surviving Corporation or any of its subsidiaries or to receive any payment in
respect thereof. The Company will use its reasonable best efforts to obtain all
necessary consents to ensure that after the Effective Time, the only rights of
the holders of Options to purchase shares of Common Stock in respect of such
Options will be to receive the Cash Payment in cancellation and settlement
thereof. Notwithstanding any other provision of this Section 2.07 to the
contrary, payment of the Cash Payment may be withheld with respect to any Option
until the necessary consents are obtained.
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2.08 Certificate of Incorporation of the Surviving
Corporation. The Certificate of Incorporation of the Company, as in effect
immediately prior to the Effective Time, shall be the Certificate of
Incorporation of the Surviving Corporation.
2.09 By-Laws of the Surviving Corporation. The By-Laws of Sub,
as in effect immediately prior to the Effective Time, shall be the By-Laws of
the Surviving Corporation.
2.10 Directors and Officers of the Surviving Corporation. At
the Effective Time, the directors of Sub immediately prior to the Effective Time
shall be the directors of the Surviving Corporation, each of such directors to
hold office, subject to the applicable provisions of the Certificate of
Incorporation and By-Laws of the Surviving Corporation, until the next annual
stockholders' meeting of the Surviving Corporation and until their respective
successors shall be duly elected or appointed and qualified. At the Effective
Time, the officers of the Company immediately prior to the Effective Time shall,
subject to the applicable provisions of the Certificate of Incorporation and
By-Laws of the Surviving Corporation, be the officers of the Surviving
Corporation until their respective successors shall be duly elected or appointed
and qualified.
2.11 Closing. The closing of the Merger (the "Closing") shall
take place at the offices of Sullivan and Cromwell, 125 Broad Street, New York,
New York, as soon as practicable after the last of the conditions set forth in
Article V hereof is fulfilled or waived (subject to applicable law) but in no
event later than the fifth business day thereafter, or at such other time and
place and on such other date as Parent and the Company shall mutually agree (the
"Closing Date").
ARTICLE III
REPRESENTATIONS AND WARRANTIES
3.01 Representations and Warranties of the Company. The
Company hereby represents and warrants to Parent and Sub as follows:
(a) Due Organization, Good Standing and Corporate Power. Each
of the Company and its subsidiaries is a corporation duly organized,
validly existing and in good standing under the laws of the
jurisdiction of its incorporation and each such corporation has all
requisite corporate power and authority to own, lease and operate its
properties and to carry on its business as now being conducted. Except
as set forth in Section 3.01(a) of the Company's disclosure letter (the
"Company Disclosure Letter") delivered concurrently with the delivery
of this Agreement, each of the Company and its subsidiaries is duly
qualified or licensed to do business and is in good standing in each
jurisdiction in which the property owned, leased or operated
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by it or the nature of the business conducted by it makes such
qualification necessary, except where such failure to be so qualified
or licensed and in good standing would not have a material adverse
effect on the business, operations or results of operations, financial
condition (the "Condition") of the Company and its subsidiaries taken
as a whole, or would not be reasonably likely to prevent or materially
delay consummation of the transactions contemplated by this Agreement.
The Company has made available to Parent and Sub complete and correct
copies of the Certificate of Incorporation and By-Laws of the Company
and the comparable governing documents of each of its subsidiaries, in
each case as amended to the date of this Agreement.
(b) Authorization and Validity of Agreement. The Company has
the corporate power and authority to execute and deliver this
Agreement, to perform its obligations hereunder and to consummate the
transactions contemplated hereby. The execution, delivery and
performance of this Agreement by the Company, and the consummation by
it of the transactions contemplated hereby, have been duly authorized
and unanimously approved by its Board of Directors and no other
corporate action on the part of the Company is necessary to authorize
the execution, delivery and performance of this Agreement by the
Company and the consummation of the transactions contemplated hereby
(other than the approval of this Agreement by the holders of a majority
of the outstanding shares of Common Stock entitled to vote) or the
consummation of the transactions contemplated by the Stockholders
Agreement. This Agreement has been duly executed and delivered by the
Company and is a valid and binding obligation of the Company
enforceable against the Company in accordance with its terms, except to
the extent that its enforceability may be subject to applicable
bankruptcy, insolvency, reorganization, moratorium and similar laws
affecting the enforcement of creditors' rights generally and by general
equitable principles.
(c) Capitalization. (i) The authorized capital stock of the
Company consists of 60,000,000 shares of Common Stock and 2,000,000
shares of preferred stock, par value $0.01. As of June 15, 1998, (1)
39,012,786 shares of Common Stock are issued of which 21,469,754 are
outstanding, (2) 2,164,077 shares of Common Stock are reserved for
issuance pursuant to outstanding Options granted under the Stock Plans,
(3) 17,543,032 shares of Common Stock are held in the Company's
treasury and (4) no shares of preferred stock were issued and
outstanding. All issued and outstanding shares of Common Stock have
been duly authorized, validly issued and are fully paid and
nonassessable and are not subject to, nor were they issued in violation
of any preemptive rights. Except as set forth in this Section 3.01(c)
or in Section 3.01(c) of the Company Disclosure Letter, (i) there are
no shares of capital stock of the Company authorized, issued or
outstanding and (ii) there are not as of the date hereof, and at the
Effective Time there will not be, any outstanding or authorized
options, warrants, rights, subscriptions, claims of any character,
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agreements, rights of redemption, convertible or exchangeable
securities, or other commitments, contingent or otherwise, relating to
Common Stock or any other shares of capital stock of the Company,
pursuant to which the Company is or may become obligated to issue
shares of Common Stock, any other shares of its capital stock or any
securities convertible into, exchangeable for, or evidencing the right
to subscribe for, any shares of the capital stock of the Company. After
the Effective Time, the Surviving Corporation will have no obligation
to issue, transfer or sell any shares of or common stock of the
Surviving Corporation pursuant to any Employee Benefit Plan (as defined
in Section 3.01(j)). Neither the Company nor any of its subsidiaries
has authorized or issued any bonds, debentures, notes or other
indebtedness the holders of which have the right to vote (or
convertible or exchangeable into or exercisable for securities having
the right to vote) with the stockholders of the Company or any of its
subsidiaries on any matter.
(ii) Section 3.01(c)(ii) of the Company Disclosure
Letter lists all of the Company's subsidiaries. All of the
outstanding shares of capital stock of each of the Company's
subsidiaries have been duly authorized and validly issued, are
fully paid and nonassessable, are not subject to, nor were
they issued in violation of, any preemptive rights, and are
owned, of record and beneficially, by the Company, free and
clear of all liens, security interests, rights of first
refusal, charges, security agreements, encumbrances, options,
claims or any other encumbrances of any kind whatsoever
("Encumbrance") except as set forth in Section 3.01(c)(ii) of
the Company Disclosure Letter. No shares of capital stock of
any of the Company's subsidiaries are reserved for issuance or
are held in the treasury of such subsidiary and there are no
outstanding or authorized options, warrants, rights, calls,
subscriptions, claims of any character, agreements,
obligations, rights of redemption, convertible or exchangeable
securities, or other commitments, contingent or otherwise,
relating to the capital stock of any subsidiary, pursuant to
which such subsidiary is or may become obligated to issue any
shares of capital stock of such subsidiary or any securities
convertible into, exchangeable for, or evidencing the right to
subscribe for, any shares of such subsidiary. Other than as
set forth in Section 3.01(c)(ii) of the Company Disclosure
Letter, there are no restrictions of any kind which prevent
the payment of dividends by any of the Company's subsidiaries.
Except for the subsidiaries listed in Section 3.01(c)(ii) of
the Company Disclosure Letter, the Company does not own,
directly or indirectly, any capital stock or other equity
interest in any Person or have any direct or indirect equity
or ownership interest in any Person and neither the Company
nor any of its subsidiaries is subject to any obligation or
requirement to provide funds for or to make any investment (in
the form of a loan or capital contribution) to or in any
Person.
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<PAGE>
(d) Consents and Approvals; No Violations. Assuming (i) the
filings required under the Hart-Scott-Rodino Antitrust Improvements Act
of 1976, as amended (the "HSR Act"), are made and the waiting period
thereunder has been terminated or has expired, (ii) the requirements of
the Exchange Act relating to the Proxy Statement and the Offer are met,
(iii) the filing of the Certificate of Merger and other appropriate
merger documents, if any, as required by DGCL are made and (iv)
approval of the Merger by holders a majority of the outstanding shares
of Common Stock entitled to vote, if required by the DGCL, is received,
the execution, delivery and performance of this Agreement by the
Company and the consummation of the transactions contemplated hereby
will not: (1) violate any provision of the Certificate of Incorporation
or By-Laws of the Company or the comparable governing documents of any
of its subsidiaries, in each case, as amended; (2) violate any statute,
code, ordinance, rule, regulation, order or decree (collectively
"Laws") of any court, arbitrator or of any governmental or regulatory
body, agency or authority (each a "Governmental Entity") applicable to
the Company or any of its subsidiaries or their respective properties
or assets; (3) require any filing with, or permit, consent or approval
of, or the giving of any notice to, any Governmental Entity by the
Company; or (4) except as set forth in Section 3.01(d) of the Company
Disclosure Letter, result in a violation or breach of, conflict with,
constitute (with or without due notice or lapse of time or both) a
default (or give rise to any right of termination, cancellation,
payment, acceleration or other material right or obligation or
limitation) under, or result in the creation of any Encumbrance upon
any of the properties or assets of the Company or any of its
subsidiaries under, any of the terms, conditions or provisions of any
note, bond, mortgage, indenture, license, franchise, permit, agreement,
lease, franchise agreement or other instrument or obligation to which
the Company or any of its subsidiaries is a party, or by which it or
any of their respective properties or assets are bound or subject
except for in the case of clauses (3) and (4) above for any such
filings, permits, consents, approvals, violations, breaches or
Encumbrances which, individually or in the aggregate would not have a
material adverse effect on the Condition of the Company and its
subsidiaries taken as a whole, or would not be reasonably likely to
prevent or materially delay consummation of the transactions
contemplated by this Agreement (including the transactions contemplated
by the Stockholders Agreement).
(e) Company Reports and Financial Statements. (i) Since
January 1, 1996 the Company has filed all forms, reports and documents
with the Commission required to be filed by it pursuant to the federal
securities laws and the Commission rules and regulations thereunder,
and all forms, reports and documents filed with the Commission by the
Company have complied in all material respects with all applicable
requirements of the federal securities laws and the Commission rules
and regulations promulgated thereunder. The Company has made available
to Parent true and complete copies of all forms, reports, registration
statements and other filings filed by the Company with the Commission
from January 1, 1996 through the date
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<PAGE>
of this Agreement (such forms, reports, registration statements and
other filings, together with any exhibits, any amendments thereto and
information incorporated by reference therein, are sometimes
collectively referred to as the "Commission Filings"). As of their
respective dates, the Commission Filings did not contain any untrue
statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading.
Each of the consolidated balance sheets, and the consolidated
statements of operations, consolidated statements of stockholders'
equity and consolidated statements of cash flows, included in the
Commission Filings, were prepared in accordance with generally accepted
accounting principles ("GAAP") (as in effect from time to time) applied
on a consistent basis, (except as may be indicated therein or in the
notes or schedules thereto) and fairly present, in all material
respects, the consolidated financial position of the Company and its
consolidated subsidiaries as of the dates thereof and the results of
their operations and changes in cash flows for the periods then ended.
(ii) The Company shall deliver to Sub and Parent as
soon as they become available true and complete copies of any
report or statement mailed by it to its stockholders generally
or filed by it with the Commission subsequent to the date
hereof and prior to the Effective Time. As of their respective
dates, such reports and statement will not contain any untrue
statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which
they are made, not misleading and will comply in all material
respects with all applicable requirements of the federal
securities laws and the Commission rules and regulations
thereunder. The consolidated financial statements of the
Company included in such reports and statement will be
prepared in accordance with GAAP applied on a consistent basis
(except as may be indicated therein or in the notes or
schedules thereto) and will fairly present in all material
respects the consolidated financial position of the Company
and its consolidated subsidiaries as of the dates thereof and
the results of their operations and their cash flows for the
periods then ended (subject in the case of any unaudited
financial statements, to normal year-end adjustments).
(f) Absence of Certain Changes. Except as previously disclosed
in the Commission Filings or as set forth in Section 3.01(f) of the
Company Disclosure Letter, since March 31, 1997 or as specifically
contemplated by this Agreement (i) there has not been any material
adverse change in the Condition of the Company and its subsidiaries
taken as a whole; (ii) the businesses of the Company and each of its
subsidiaries have been conducted only in the ordinary course consistent
with past practice; (iii) neither the Company nor any of its
subsidiaries has incurred any material liabilities (direct, contingent
or otherwise) or engaged in any material
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<PAGE>
transaction or entered into any material agreement outside of the
ordinary course of business consistent with past practice; (iv) the
Company and its subsidiaries have not increased the compensation of any
officer or granted any general salary or benefits increase to their
employees, in each case other than in the ordinary course of business
consistent with past practice; (v) neither the Company nor any of its
subsidiaries has taken any action referred to in Section 4.03 hereof,
except as permitted thereby; (vi) there has been no declaration,
setting aside or payment of any dividend or other distribution with
respect to the capital stock of the Company; (vii) there has been no
change by the Company in accounting principles, practices or methods,
except as may have been required by GAAP or applicable Law and (viii)
neither the Company nor any of its subsidiaries has agreed (whether or
not in writing) to do any of the foregoing.
(g) Title to Properties; Encumbrances. The Company and each of
its subsidiaries has good, valid and marketable title to (i) all of its
material tangible properties and assets (real and personal), including,
without limitation, all the properties and assets reflected in the
consolidated balance sheet as of December 31, 1997 except as indicated
in the notes thereto and except for properties and assets reflected in
the consolidated balance sheet as of March 31, 1997 which have been
sold or otherwise disposed of in the ordinary course of business
consistent with past practice after such date, and (ii) all the
material tangible properties and assets purchased by the Company and
any of its subsidiaries since March 31, 1997 except for such properties
and assets which have been sold or otherwise disposed of in the
ordinary course of business consistent with past practice; in each case
subject to no Encumbrance, except for (1) Encumbrances set forth in the
consolidated balance sheet as of March 31, 1997 (including the notes
thereto) or as set forth in Section 3.01(g) of the Company Disclosure
Letter, (2) Encumbrances consisting of zoning or planning restrictions,
easements, permits and other restrictions or limitations on the use of
real property or irregularities in title thereto which do not
materially detract from the value of, or impair the use of, such
property by the Company or any of its subsidiaries in the operation of
its respective business, (3) statutory liens or liens of landlords,
carriers, warehousemen, mechanics, suppliers, materialmen or repairmen
arising in the ordinary course of business, (4) Encumbrances for
current taxes, assessments or governmental charges or levies on
property not yet due and delinquent and (5) such Encumbrances as,
individually or in the aggregate, would not be reasonably expected to
have a material adverse effect on the Condition of the Company and its
subsidiaries taken as a whole. All of the material properties and
assets of the Company and its subsidiaries are in good working order,
normal wear and tear excepted and are suitable for their current uses
in their respective businesses.
(h) Compliance with Laws. Except as set forth in Section
3.01(h) of the Company Disclosure Schedule, the Company and its
subsidiaries are in compliance with applicable Laws except where the
failure to so comply would not have a
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<PAGE>
material adverse effect on the Condition of the Company and its
subsidiaries taken as a whole or would not prevent or materially delay
consummation of the transactions contemplated by this Agreement.
(i) Litigation. Except as disclosed in the Commission Filings
or as set forth in Section 3.01(i) of the Company Disclosure Letter,
there is no action, suit, proceeding at law or in equity, or any
arbitration or any administrative or other proceeding by or before (or
to the knowledge of the Company any investigation by) any Governmental
Entity, pending, or to the best knowledge of the Company, threatened,
against or affecting the Company or any of its subsidiaries, or any of
their properties, assets or rights which would be reasonably likely to
have a material adverse effect on the Condition of the Company and its
subsidiaries taken as a whole or would prevent or materially delay
consummation of the transactions contemplated by this Agreement. Except
as disclosed in the Commission Filings, neither the Company nor any of
its subsidiaries is subject to any judgment, order or decree entered in
any lawsuit, arbitration or other proceeding which would have a
material adverse effect on the Condition of the Company and its
subsidiaries taken as a whole or on the ability of the Company or any
subsidiary to conduct its business as presently conducted or would
prevent or materially delay consummation of the transactions
contemplated by this Agreement.
(j) Employee Benefit Plans. (i) Each employee benefit plan
within the meaning of Section 3(3) of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA"), maintained by the Company
and/or any of its United States subsidiaries or to which the Company or
any such subsidiary contributes (or has any obligation to contribute)
(collectively, the "US Employee Benefit Plans") is listed in Section
3.01(j)(i) of the Company Disclosure Letter. Also listed on the
Disclosure Schedule are any bonus, deferred compensation, profit
sharing, thrift, savings, employee stock ownership, stock bonus, stock
purchase, restricted stock, stock option, employment, termination,
severance, change of control or incentive compensation plan or
agreement maintained by the Company or any of its subsidiaries. Except
as set forth in Section 3.01(j)(i) of the Company Disclosure Letter:
(1) each US Employee Benefit Plan is in material compliance with
applicable law and has been administered and operated in all respects
in accordance with its terms; (2) each US Employee Benefit Plan which
is intended to be "qualified" within the meaning of Section 401(a) of
the Internal Revenue Code of 1986, as amended (the "Code"), has
received a favorable determination letter from the Internal Revenue
Service with respect to "TRA" (as defined in Section 1 of Rev. Proc.
93-39) and, to the knowledge of the Company, no event has occurred and
no condition exists which would result in the revocation of any such
determination; (3) no US Employee Benefit Plan is covered by Title IV
of ERISA or subject to Section 412 of the Code or Section 302 of ERISA;
(4) no liability under Subtitle C or D of Title IV of ERISA has been or
is expected to be incurred by the Company or any of its subsidiaries
with
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respect to any ongoing, frozen or terminated "single-employer plan",
within the meaning of Section 4001(a)(15) of ERISA, covered by Title IV
of ERISA ("Single Employer Plan") currently or formerly maintained by
any of them, or the Single-Employer Plan of any entity which is
considered one employer with the Company under Section 4001 of ERISA or
Section 414(b) or (c) of the Code (an "ERISA Affiliate"); (5) no notice
of a "reportable event", within the meaning of Section 4043 of ERISA
for which the 30-day reporting requirement has not been waived, has
been required to be filed for any U.S. Employee Benefit Plan covered by
Title IV of ERISA ("Pension Plan") within the 12-month period ending on
the date hereof or will be required to be filed in connection with the
transactions contemplated by this Agreement; (6) neither any Pension
Plan nor any Single-Employer Plan of an ERISA Affiliate has an
"accumulated funding deficiency" (whether or not waived) within the
meaning of Section 412 of the Code or Section 302 of ERISA and no ERISA
Affiliate has an outstanding funding waiver; (7) neither the Company
nor any of its subsidiaries has provided, or is required to provide,
security to any Pension Plan or to any Single-Employer Plan of an ERISA
Affiliate pursuant to Section 401(a)(29) of the Code; (8) under each
Pension Plan which is a Single-Employer Plan, as of the last day of the
most recent plan year ended prior to the date hereof, the actuarially
determined present value of all "benefit liabilities", within the
meaning of Section 4001(a)(16) of ERISA (as determined on the basis of
the actuarial assumptions contained in the Plan's most recent actuarial
valuation), did not exceed the then current value of the assets of such
Plan, and there has been no material change in the financial condition
of such Plan since the last day of the most recent plan year; (9) the
withdrawal liability of the Company and its subsidiaries under each
U.S. Employee Benefit Plan which is a multiemployer plan to which the
Company, any of its subsidiaries or an ERISA affiliate has contributed
during the preceding 12 months, determined as if a "complete
withdrawal", within the meaning of Section 4203 of ERISA, had occurred
as of the date hereof, does not exceed $100,000; (10) neither the
Company nor any of its subsidiaries, nor, to the Company's knowledge,
any other "disqualified person" or "party in interest" (as defined in
Section 4975(e)(2) of the Code and Section 3(14) of ERISA,
respectively) has engaged in any transactions in connection with any US
Employee Benefit Plan that would result in the imposition of a penalty
pursuant to Section 502 of ERISA, damages pursuant to Section 409 of
ERISA or a tax pursuant to Section 4975 of the Code; (11) no US
Employee Benefit Plan provides for post-employment or retiree health or
life insurance benefits, except to the extent required by Part 6 of
Subtitle B of Title I of ERISA or Section 4980B of the Code; (12) no
litigation or administrative proceeding has been commenced, or, to the
Company's knowledge, threatened with respect to any US Employee Benefit
Plan (other than routine claims for benefits payable in the ordinary
course, and appeals of denied such claims); (13) all contributions
required to be made under the terms of any US Employee Benefit Plan
have been timely made or have been reflected in the Audited Financial
Statements or the Preliminary Financial Statements.
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(ii) Each employee benefit plan other than any US Employee
Benefit Plan maintained or contributed to by any non-United States
subsidiary of the Company is listed in Section 3.01(j)(ii) of the
Company Disclosure Letter (collectively, the "Foreign Employee Benefit
Plans"). Except as set forth in Section 3.01(j)(ii) of the Company
Disclosure Letter: (1) each Foreign Employee Benefit Plan is in
compliance with applicable law and has been administered and operated
in all respects in accordance with its terms; and (2) no litigation or
administrative proceeding has been commenced, or, to the Company's
knowledge, threatened, with respect to any Foreign Employee Benefit
Plan (other than routine claims for benefits payable in the ordinary
course, and appeals of denied such claims); and (3) with respect to
each Foreign Employee Benefit Plan which is a pension plan, the Company
and its subsidiaries have no material unfunded liabilities with respect
to any such pension plan.
(k) Taxes. (i) The Company has filed or caused to be filed, or
will file or cause to be filed on or prior to the Closing Date, all
material federal, state, local and foreign tax returns and tax reports
which are required to be filed by, or with respect to, the Company on
or prior to the Closing Date (taking into account any extension of time
to file granted to or on behalf of the Company) (collectively, the
"Returns"). Except as set forth in Section 3.01(k) of the Company
Disclosure Letter, all material federal, state, local and foreign
income, gross receipts, windfall profits, severance, property, sales,
use, license, excise, franchise, employment, withholding or similar
taxes imposed on the income, properties or operations of the Company,
together with any interest, additions to tax or penalties with respect
thereto and any interest in respect of such additions to tax or
penalties ("Taxes") due and payable by the Company have been, or prior
to the Closing Date will be, paid or fully provided for on the books
and records of the Company in accordance with GAAP, and all material
Taxes not yet due and payable with respect to periods (or portions
thereof) ending on or prior to the Closing Date have been or will be
fully provided for on the books and records of the Company in
accordance with generally accepted accounting principles. Except as set
forth in Section 3.01(k) of the Company Disclosure Letter, (a) all
Returns with respect to periods ending on or before the Closing Date
have been examined by the Internal Revenue Service or the appropriate
state, local or foreign taxing authority or the period for assessment
of the Taxes in respect of which such Returns were required to be filed
has expired, (b) no issues have been raised by any relevant taxing
authority in connection with an audit or examination of any such
Returns which are currently pending, and (c) no waivers of statutes of
limitation are in effect with respect to any Taxes of the Company.
(ii) The Company is not, nor was it at any time
during the five-year period ending on the Closing Date, a
"United States real property holding corporation" within the
meaning of Section 897(c) of the Code.
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(iii) Except as set forth in Section 3.01(k) of the
Company Disclosure Letter, none of the Company, Parent or Sub
will be obligated as a result of the transactions contemplated
by this Agreement to make a payment that would be a "parachute
payment" to a "disqualified individual" as those terms are
defined in Section 280G of the Code without regard to whether
such payment is reasonable compensation for personal services
performed or to be performed in the future.
(l) Liabilities. Except as set forth in Section 3.01(l) of the
Company Disclosure Letter, neither the Company nor any of its
subsidiaries has any material claims, liabilities or indebtedness
outstanding except (i) as set forth in the consolidated balance sheet
of the Company as of March 31, 1997, (ii) for liabilities incurred
subsequent to March 31, 1997, in the ordinary course of business
consistent with past practice, (iii) as set forth in the Commission
Filings.
(m) Intellectual Properties. Except as would not have a
material adverse effect on the Condition of the Company and its
subsidiaries, taken as a whole, the Company and its subsidiaries own or
have valid, binding and enforceable rights to use all patents,
trademarks, trade names, service marks, service names, copyrights,
applications therefor and licenses or other rights in respect thereof
("Intellectual Property") used or held for use in connection with the
business of the Company or its subsidiaries, without any known conflict
with the rights of others. Except as set forth in Section 3.01(m) of
the Company Disclosure Letter, neither the Company nor any of its
subsidiaries has received any notice from any other Person pertaining
to or challenging the right of the Company or any of its subsidiaries
to use any Intellectual Property or any trade secrets, proprietary
information, inventions, know-how, processes and procedures owned or
used by or licensed to the Company or its subsidiaries, except with
respect to rights the loss of which, individually or in the aggregate,
would not be reasonably likely to have a material adverse effect on the
Condition of the Company and its subsidiaries, taken as a whole.
(n) Material Contracts. Except as set forth in Section
3.01(n) of the Company Disclosure Letter, neither the Company nor
any of its subsidiaries has or is bound by:
(i) any agreement, contract or commitment that
involves the performance of services by it of an amount or
value (as measured by the revenue derived therefrom during
1997) in excess of $500,000 annually, unless terminable by the
Company or its relevant subsidiary on not more than 90 days
notice,
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(ii) any agreement, indenture or other instrument
which contains restrictions with respect to payment of
dividends or any other distribution in respect of its capital
stock,
(iii) any agreement, contract or commitment to be
performed relating to capital expenditures in excess of
$100,000 in any calendar year, or in the aggregate require
expenditures in excess of $1,000,000 other than those capital
expenditures approved as part of the Company's fiscal 1999
budget a true and correct copy of which has heretofore been
provided to Parent,
(iv) any agreement, indenture or instrument relating
to indebtedness for borrowed money or the deferred purchase
price of property (excluding trade payables in the ordinary
course of business, intercompany indebtedness and leases for
telephones, copy machines, facsimile machines and other office
equipment),
(v) any loan or advance to (other than advances to
employees in the ordinary course of business in amounts of
$25,000 or less to any individual and $100,000 in the
aggregate), or investment in (other than investments in
subsidiaries), any Person, or any agreement, contract or
commitment relating to the making of any such loan, advance or
investment or any agreement, contract or commitment involving
a sharing of profits (except for bonus arrangements with
employees entered into in the ordinary course of business
consistent with past practice),
(vi) any guarantee or other contingent liability in
respect of any indebtedness or obligation of any Person (other
than in the ordinary course of business, consistent with past
practice or with respect to any indebtedness or obligation of
the Company or any subsidiary),
(vii) any management service, consulting or any other
similar type of contract, involving payments of more than
$250,000 annually, unless terminable by the Company on not
more than 90 days notice,
(viii) any agreement, contract or commitment limiting
the ability of the Company or any of its subsidiaries to
engage in any line of business or to compete with any Person,
(ix) any warranty, guaranty or other similar
undertaking with respect to a contractual performance extended
by the Company or any of its subsidiaries other than in the
ordinary course of business, or
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(x) any material amendment, modification or
supplement in respect of any of the foregoing.
Except as otherwise set forth in Section 3.01(n) of the
Company Disclosure Letter, each contract or agreement set forth in Section
3.01(n) of the Company Disclosure Letter is in full force and effect and (A)
there exists no default or event of default or event, occurrence, condition or
act (including the consummation of Offer or the Merger) on the part of the
Company or any subsidiary which, with the giving of notice, the lapse of time or
the happening of any other event or condition, would become a default or event
of default thereunder and (B) no approval or consent of, or notice to, any
person is needed in order that each such contract or agreement shall continue in
full force and effect in accordance with its terms without penalty, acceleration
or rights of early termination by reason of the consummation of the transactions
contemplated by this Agreement.
(o) Proxy Statement and Schedule l4D-9. The definitive proxy
statement and related materials, if required, to be furnished to the
holders of Common Stock in connection with the Merger pursuant to
Section 4.04 hereof (the "Proxy Statement") will comply in all material
respects with the Exchange Act and the rules and regulations thereunder
and any other applicable laws. If at any time prior to the Effective
Time any event occurs which should be described in an amendment or
supplement to the Proxy Statement, the Company will promptly file and
disseminate, as required, an amendment or supplement which complies in
all material respects with the Exchange Act and the rules and
regulations thereunder and any other applicable laws. Prior to its
filing with the Commission, Parent and Sub and their Counsel shall have
a reasonable opportunity to review the amendment or supplement. None of
the information supplied by the Company for inclusion in the Proxy
Statement, will, at the date such information is supplied and at the
Effective Time, contain any untrue statement of a material fact or omit
to state any material fact necessary in order to make the statements
made, in light of the circumstance under which they are made, not
misleading. None of the information in the Schedule 14D-9, at the
respective times the Schedule 14D-9 is filed with the Commission, will
contain any untrue statement of a material fact or omit to state a
material fact necessary to make the statements made, in light of the
circumstances under which they are made, not misleading.
Notwithstanding the foregoing, no representation or warranty is made
with respect to any information with respect to Parent, Sub or their
officers, directors or affiliates provided to the Company by Parent or
Sub in writing for inclusion in the Schedule 14D-9. The Schedule l4D-9
will comply in all material respects with the Exchange Act and the
rules and regulations thereunder and any other applicable laws. If at
any time prior to the expiration or termination of the Offer any event
occurs which should be described in an amendment or supplement to the
Schedule l4D-9 or any amendment or supplement thereto, the Company will
promptly file and disseminate, as required, an amendment or supplement
which complies in all material respects with the Exchange Act and the
rules and regulations
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thereunder and any other applicable laws. Prior to its filing with the
Commission, Parent and Sub and their Counsel shall have a reasonable
opportunity to review the amendment or supplement. None of the
information supplied by the Company to Parent or Sub for inclusion or
incorporation by reference in the Offer Documents contained, at the
respective times the Offer Documents were filed with the SEC, any
untrue statement of a material fact or omitted to state any material
fact necessary in order to make the statements made therein, in light
of the circumstances under which they were made, not misleading.
(p) Broker's or Finder's Fee. Except for Berenson Minella
(whose fees and expenses will be paid by the Company in accordance with
the Company's agreement with such firm) no agent, broker, Person or
firm acting on behalf of the Company is, or will be, entitled to any
fee, commission or broker's or finder's fees from any of the parties
hereto, or from any Person controlling, controlled by, or under common
control with any of the parties hereto, in connection with this
Agreement or any of the transactions contemplated hereby.
(q) Environmental Laws and Regulations. Except as set forth in
Section 3.01(q) of the Company Disclosure Letter, or as would not have
a material adverse effect on the Condition of the Company and its
subsidiaries, taken as a whole:
(i) Hazardous Materials have not been generated,
used, treated or stored on any Company Property, except for
quantities used or stored at such Property in compliance with
Environmental Laws, required in connection with the normal
operations and maintenance of such Property and as would not
reasonably be expected to result in liability under any
Environmental Law.
(ii) Hazardous Materials have not been released or
disposed of on any Company Property, except for quantities
released on such Property in compliance with Environmental
Laws and required in the normal operation and maintenance of
such Property.
(iii) The Company and its subsidiaries are in
compliance with Environmental Laws and the requirements of
permits issued under such Environmental Laws with respect to
any Company Property.
(iv) There are no pending or threatened Environmental
Claims against the Company, any of its subsidiaries or, to the
knowledge of the Company, any Company Property.
(v) neither the Company nor any subsidiary is subject
to any order, decree, injunction or other arrangement with any
Governmental Entity
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or any indemnity or other agreement with any third party
relating to liability under any Environmental Law.
(vi) none of the properties of the Company or any
subsidiary contain any underground storage tanks,
asbestos-containing material, lead products, or
polychlorinated biphenyls.
(vii) there are no other circumstances or conditions
involving the Company or any subsidiary that could reasonably
be expected to result in any claims, liability,
investigations, costs or restrictions on the ownership, use,
or transfer of any property in connection with any
Environmental Law.
As used in this Section 3.01(q), the following terms shall
have the meanings set forth below:
(i) "Company Property" means any real property and
improvements currently or formerly owned, leased, used,
operated or occupied by the Company or any of its
subsidiaries.
(ii) "Hazardous Materials" means (a) any petroleum or
petroleum products, radioactive materials, asbestos in any
form that is friable, urea formaldehyde foam insulation,
transformers or other equipment that contain dielectric fluid
containing levels of polychlorinated biphenyls, and radon gas;
and (b) any chemicals, materials or substances defined as or
included in the definition of "Hazardous substances,"
"hazardous wastes," "hazardous materials," "extremely
hazardous wastes," "restricted hazardous wastes," "toxic
substances," "toxic pollutants," or words of similar import,
under any applicable Environmental Law or otherwise regulated
under any Environmental Law.
(iii) "Environmental Law" means any applicable
federal, state, foreign or local statute, law, rule,
regulation, ordinance, code, policy or rule of common law in
effect and in each case as amended as of the Closing Date, and
any judicial or administrative interpretation thereof as of
the Closing Date, including any judicial or administrative
order, consent decree or judgment, relating to the
environment, health, safety or Hazardous Materials, including
the Comprehensive Environmental Response, Compensation, and
Liability Act of 1980, as amended, 42 U.S.C. ss. 9601 et seq.;
the Resource Conservation and Recovery Act, as amended, 42
U.S.C. ss. 6901 et seq.; the Federal Water Pollution Control
Act, as amended, 33 U.S.C. ss. 1251 et seq.; the Toxic
Substances Control Act, 15 U.S.C. ss. 2601 et seq.; the Clean
Air Act, 42 U.S.C. ss. 7401 et seq.; the Occupational Safety
and Health Act, 28 U.S.C. ss. 2412; the Safe Drinking Water
Act, 42 U.S.C. ss. 300f et seq.; the Oil
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Pollution Act of 1990, 33 U.S.C. ss. 2701 et seq.; and their
state and local counterparts and equivalents.
(iv) "Environmental Claims" means administrative,
regulatory or judicial actions, suits, demands, demand
letters, claims, liens, notices of non-compliance or
violation, investigations or proceedings relating in any way
to any Environmental Law or any permit issued under any such
Law (hereafter "Claims"), including (a) Claims by governmental
or regulatory authorities for enforcement, investigations,
monitoring, cleanup, removal, response, remedial or other
actions or damages pursuant to any applicable Environmental
Law, and (b) Claims by any third party relating to any
Environmental Law seeking damages, contribution,
indemnification, cost recovery, compensation or injunctive
relief resulting from Hazardous Materials or arising from
alleged injury or threat of injury to health, safety or the
environment.
(v) "Release" means disposing, discharging,
injecting, spilling, leaking, leaching, dumping, emitting,
escaping, emptying, seeping, placing and the like, into or
upon any land or water or air, or otherwise entering into the
environment.
(r) State Takeover Statutes; Charter Provisions. Section 203
of the DGCL is inapplicable to the Offer, the Merger, this Agreement
and the Stockholders Agreement and the transactions contemplated hereby
and thereby. No other state takeover statute or similar statute or
regulation applies to the Offer, the Merger or the transactions
contemplated hereby or by the Stockholders Agreement.
(s) Opinion of Financial Advisor. The Company has received the
opinion of Berenson Minella, to the effect that, as of the date of this
Agreement, the consideration per share of Common Stock to be received
in the Offer and the Merger by the Company's stockholders is fair to
the Company's stockholders from a financial point of view, and a
complete and correct signed copy of such opinion has been, or will be,
delivered to Sub and Parent.
(t) Rights Agreement. The Company has not adopted or otherwise
implemented a stockholder rights plan or other similar agreement or
instrument.
(u) Voting Requirements. Unless the Merger is consummated in
accordance with the provisions of Section 253 of the DGCL, the
affirmative vote of the holders of a majority of the outstanding shares
of Common Stock is the only vote of the holders of any class or series
of the Company's capital stock necessary to approve this Agreement and
the transactions contemplated hereby.
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3.02 Representations and Warranties of Parent and Sub. Each of
Parent and Sub represents and warrants to the Company as follows:
(a) Due Organization; Good Standing and Corporate Power.
Parent is a corporation duly organized and validly existing and in good
standing under the laws of its jurisdiction of incorporation. Sub is a
corporation duly organized, validly existing and in good standing under
the laws of its jurisdiction of incorporation. Each of Parent and Sub
has all requisite corporate power and authority to own, lease and
operate its properties and to carry on its business as now being
conducted except such instances where the failure to have such power
and authority, individually or in the aggregate, would not prevent or
materially delay the consummation of the transactions contemplated by
this Agreement.
(b) Authorization and Validity of Agreement. Each of Parent
and Sub has the corporate power and authority to execute and deliver
this Agreement, to perform its obligations hereunder and to consummate
the transactions contemplated hereby. The execution, delivery and
performance of this Agreement by Parent and Sub, and the consummation
by each of them of the transactions contemplated hereby, have been duly
authorized by the Boards of Directors of each of Parent and Sub. No
other corporate action on the part of either of Parent or Sub is
necessary to authorize the execution, delivery and performance of this
Agreement by each of Parent and Sub and the consummation of the
transactions contemplated hereby. This Agreement has been duly executed
and delivered by each of Parent and Sub and is a valid and binding
obligation of each of Parent and Sub, enforceable against each of
Parent and Sub in accordance with its terms, except that such
enforcement may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting creditors'
rights generally, and general equitable principles.
(c) Consents and Approvals; No Violations. Assuming (i) the
filings required under the HSR Act are made and the waiting period
thereunder has been terminated or has expired, (ii) the requirements of
the Exchange Act relating to the Proxy Statement and the Offer are met,
and (iii) the filing of the Certificate of Merger and other appropriate
merger documents, if any, as required by the laws of the State of
Delaware, the execution and delivery of this Agreement by Parent and
Sub and the consummation by Parent and Sub of the transactions
contemplated hereby will not: (1) violate any provision of the
Certificate of Incorporation or By-Laws of either Parent or Sub; (2)
violate any statute, ordinance, rule, regulation, order or decree of
any court or of any governmental or regulatory body, agency or
authority applicable to Parent or Sub or by which either of their
respective properties or assets may be bound; (3) require any filing
with, or permit, consent or approval of, or the giving of any notice to
any governmental or regulatory body, agency or authority; or (4) result
in a violation or breach of, conflict with, constitute (with or without
due notice or lapse of time or both) a default (or give rise to any
right of termination, cancellation
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<PAGE>
or acceleration) under, or result in the creation of any lien, security
interest, charge or encumbrance upon any of the properties or assets of
the Parent, Sub or any of their subsidiaries under, any of the terms,
conditions or provisions of any note, bond, mortgage, indenture,
license, franchise, permit, agreement, lease or other instrument or
obligation to which Parent or Sub or any of their subsidiaries is a
party, or by which they or their respective properties or assets may be
bound except for in the case of clauses (3) and (4) above for such
filing, permit, consent, approval or violation, which would not prevent
or materially delay consummation of the transactions contemplated by
this Agreement.
(d) Offer Documents, Schedule l4D-9 and Proxy Statement. The
Offer Documents will comply in all material respects with the Exchange
Act and the rules and regulations thereunder and any other applicable
laws. The Offer Documents will not, at the time such Offer Documents
are filed with the Commission or are first published, sent or given to
the Company's stockholders, as the case may be, contain an untrue
statement of a material fact or omit to state any material fact
required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they are
made, not misleading. If at any time prior to the expiration or
termination of the Offer any event occurs which should be described in
an amendment or supplement to the Schedule l4D-1 or any amendment or
supplement thereto, Sub will file and disseminate, as required, an
amendment or supplement which complies in all material respects with
the Exchange Act and the rules and regulations thereunder and any other
applicable laws. Prior to its filing with the Commission, the amendment
or supplement shall be delivered to the Company and its counsel and the
Company shall be given the opportunity to comment thereon. The written
information supplied or to be supplied by Parent and Sub for inclusion
in the Proxy Statement and the Schedule l4D-9 of the Company will not
contain any untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements made, in light
of the circumstances under which they are made, not misleading.
Notwithstanding the foregoing, no representation or warranty is made
with respect to any information with respect to the Company or its
officers, directors and affiliates provided to Parent or Sub by the
Company in writing for inclusion in the Offer Documents or amendments
or supplements thereto.
(e) Broker's or Finder's Fee. Except for Lazard Freres & Co.
LLC (whose fees and expenses as financial advisor to Parent and Sub
will be paid by Parent or Sub), no agent, broker, Person or firm acting
on behalf of Parent or Sub is, or will be, entitled to any fee,
commission or broker's or finder's fees from any of the parties hereto,
or from any Person controlling, controlled by, or under common control
with any of the parties hereto, in connection with this Agreement or
any of the transactions contemplated hereby.
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<PAGE>
(f) Financing. Parent has available to it sufficient funds to
consummate the transactions contemplated hereby. On or prior to the
purchase of shares of Common Stock pursuant to the Offer and Effective
Time Parent shall provide or cause to be provided to Sub the funds
necessary to consummate the transactions contemplated hereby.
ARTICLE IV
TRANSACTIONS PRIOR TO CLOSING DATE
4.01 Access to Information Concerning Properties and Records.
During the period commencing on the date hereof and ending at the Effective
Time, the Company shall, and shall cause each of its subsidiaries to, upon
reasonable notice, afford Parent and Sub, and their respective counsel,
accountants, consultants and other authorized representatives, reasonable access
during normal business hours to the employees, properties, books and records of
the Company and its subsidiaries in order that they may have the opportunity to
make such investigations as they shall desire of the affairs of the Company and
its subsidiaries and all other information concerning the Company's or its
subsidiaries' business, properties and personnel as Parent and Sub may
reasonably request. The Company shall furnish promptly to Parent and Sub (a) a
copy of each report, schedule, registration statement and other document filed
by it or its subsidiaries during such period pursuant to the requirements of
Federal or state securities laws and (b) all other information concerning its or
its subsidiaries' business, properties and personnel as Parent and Sub may
reasonably request. The Company agrees to cause its officers and employees to
furnish such additional financial and operating data and other information and
respond to such inquiries as Parent and Sub shall from time to time reasonably
request.
4.02 Confidentiality. Information obtained by Parent and Sub
and their respective counsel accountants, consultants and other authorized
representatives pursuant to Section 4.01 hereof shall be subject to the
provisions of the Confidentiality Agreement between the Company and Technicolor
Video Cassettes, Inc. dated December 10, 1997.
4.03 Conduct of the Business of the Company Pending the
Closing Date. The Company agrees that, except as specifically permitted,
required or specifically contemplated by or otherwise described in this
Agreement or otherwise consented to or approved by Sub and Parent (which consent
or approval shall not be unreasonably withheld, conditioned or delayed), during
the period commencing on the date hereof and, except with respect to Section
4.03(b)(xiv) which shall survive any termination of this Agreement in accordance
with Section 6.02 hereof, ending at the Effective Time.
(a) The Company and each of its subsidiaries will conduct
their respective businesses and operations only according to their
ordinary course of business
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consistent with past practice and will use their reasonable best
efforts to preserve intact their respective business organization, keep
available the services of their officers and employees and maintain
satisfactory relationships with licensors, suppliers, distributors,
clients, landlords, joint venture partners, employees, agents and
others having business relationships with them;
(b) Neither the Company nor any of its subsidiaries shall (i)
make any change in or amendment to its Certificate of Incorporation or
By-Laws (or comparable governing documents); (ii) distribute, issue or
sell any shares of its capital stock (other than in connection with the
exercise of Options outstanding on the date hereof) or any of its other
securities, or issue any securities convertible into, or options,
warrants or rights to purchase or subscribe to, or enter into any
arrangement or contract with respect to the issuance or sale of, any
shares of its capital stock or any of its other securities, or make any
other changes in its capital structure; (iii) sell or pledge or agree
to sell or pledge any stock owned by it in any of its subsidiaries;
(iv) declare, pay, set aside or make any dividend or other distribution
or payment with respect to, or split or combine, redeem or reclassify,
or purchase or otherwise acquire any shares of its capital stock or its
other securities, other than dividends in the ordinary course,
consistent with past practice by a direct or indirect wholly owned
subsidiary to is parent, (v) (A) enter into any contract or commitment
with respect to capital expenditures in excess of $100,000,
individually or $1,000,000, in the aggregate, other than those capital
expenditures approved as part of the Company's fiscal 1999 budget; (B)
acquire (by merger, consolidation, or acquisition of stock or assets)
any corporation, partnership or other business or division thereof; or
(C) enter into, amend, modify, supplement or cancel any material
contract, (vi) except in the ordinary course of business, acquire a
material amount of assets or securities or release or relinquish any
material contract rights; (vii) except to the extent required under
existing employee and director benefit plans, agreements or
arrangements as in effect on the date of this Agreement, (a) increase
the compensation or fringe benefits of any of its directors, officers
or employees, except for increases in salary or wages of employees
(other than officers) of the Company and its subsidiaries in the
ordinary course of business, consistent with past practice, (b) grant
any severance or termination pay not currently required to be paid
under existing severance plans, (c) enter into any employment,
consulting or severance agreement or arrangement with any present or
former director, officer or other employee of the Company or any of its
subsidiaries, or (d) establish, adopt, enter into or amend or terminate
any collective bargaining, bonus, profit sharing, thrift, compensation,
stock option, restricted stock, pension, retirement, deferred
compensation, employment, termination, severance or other plan,
agreement, trust, fund, policy or arrangement for the benefit of any
present or former directors, officers or employees; (viii) transfer,
lease, license, guarantee, sell, mortgage, pledge, dispose of, encumber
or subject to any lien, any material properties or assets or incur or
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<PAGE>
modify any indebtedness or other material liability (other than
indebtedness incurred in the ordinary course under the Amended and
Restated Credit Agreement among the Company, certain of its
subsidiaries and NationsBank, N.A. (the "Existing Credit Facility") or
issue any debt securities or assume, guarantee or endorse or otherwise
as an accommodation become responsible for the obligations of another
Person or, otherwise than in the ordinary course of business,
consistent with past practice make any loan or extend credit; (ix) make
any material tax election or settle or compromise any material tax
liability; (x) except as required by applicable law or generally
accepted accounting principles, make any material change in its method
of accounting; (xi) adopt a plan of complete or partial liquidation,
dissolution, merger, consolidation, restructuring, recapitalization or
other reorganization of the Company or any of its subsidiaries not
constituting an inactive subsidiary (other than the Merger); (xii)
agree to the settlement of any material claim or litigation (including,
but not limited to any claim or litigation in respect of or related to
any Environmental Law), (xiii) permit any material insurance policy
naming it as beneficiary or a loss payable payee to be cancelled or
otherwise terminate without notice to Parent unless such insurance
policy is immediately replaced, with no gaps or lapses in coverage,
with an insurance policy issued by a financially sound and reputable
insurance company in at least such amounts and against at least such
risks as the cancelled policy for a premium not greater than 110% of
the premium for the cancelled or otherwise terminated policy, (xiv)
take any action, including, without limitation, the adoption of any
stockholder rights plan or similar agreement, arrangement or instrument
or amendments to its Certificate of Incorporation (or other
organizational or governing documents), which would, directly or
indirectly, restrict or impair the ability of Parent or Sub to vote, or
otherwise to exercise the rights and receive the benefits of a
stockholder with respect to, securities of the Company that may be
acquired or controlled by Parent or Sub or permit any stockholder to
acquire securities of the Company on a basis not available to Parent or
(xv) agree, in writing or otherwise, to take any of the foregoing
actions; and
(c) The Company shall not, and shall not permit any of its
subsidiaries to, (i) take any action (or knowingly omit to take any
action), engage in any transaction or enter into any agreement which
action, knowing omission, transaction or agreement would cause any of
the representations or warranties set forth in Section 3.01 hereof to
be untrue as of the Closing Date, or (ii) purchase or acquire, or offer
to purchase or acquire, any shares of capital stock of the Company; and
(d) The Company and each of its subsidiaries shall pay all
material Taxes and shall use reasonable best efforts to pay all other
Taxes as the same become due other than Taxes which are being contested
in good faith.
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4.04 Proxy Statement. If stockholder approval of the Merger is
required by law, as promptly as practicable, the Company will promptly prepare
and file a preliminary Proxy Statement with the Commission and will use its
reasonable efforts to respond to the comments of the Commission in connection
therewith and to furnish all information required to prepare the definitive
Proxy Statement (including, without limitation, financial statements and
supporting schedules and certificates and reports of independent public
accountants). Parent, Sub and Company will cooperate with each other in
connection with the preparation of the Proxy Statement. Without limiting the
generality of the foregoing, each of Parent and Sub will furnish to the Company
the information relating to it required by the Exchange Act to be set forth in
the Proxy Statement. Promptly after the expiration or termination of the Offer,
if required by the DGCL in order to consummate the Merger, the Company will
cause the definitive Proxy Statement to be mailed to the stockholders of the
Company and, if necessary, after the definitive Proxy Statement shall have been
so mailed, promptly circulate amended, supplemental or supplemented proxy
material and, if required in connection therewith, resolicit proxies. The
Company will not use any proxy material in connection with the meeting of its
stockholders without providing Parent and Sub with a reasonable opportunity to
review and comment on such proxy material.
4.05 Stockholder Approval. (a) Promptly after the expiration
or termination of the Offer, if required by DGCL in order to consummate the
Merger, the Company, acting through its Board of Directors, shall, in accordance
with applicable law, duly call, convene and hold a meeting of the holders of
Common Stock for the purpose of voting upon this Agreement and the Merger and
the Company agrees that this Agreement and the Merger shall be submitted at such
special meeting. The Company shall use its reasonable best efforts to solicit
from its stockholders proxies, and, subject always to the fiduciary obligations
of the Company's directors under applicable law, shall take all other action
necessary and advisable to secure the vote of stockholders required by
applicable law to obtain the approval for this Agreement and the Merger. Subject
to Section 4.07 of this Agreement, the Company agrees that it will include in
the Proxy Statement the recommendation of its Board of Directors that holders of
Common Stock approve and adopt this Agreement and approve the Merger. Parent
will cause all shares of Common Stock owned by Parent and its subsidiaries to be
voted in favor of the Merger.
(b) Notwithstanding the foregoing, in the event that Sub shall
acquire at least 90% of the outstanding Company Common Stock, the Company
agrees, at the request of Parent and Sub, subject to Article V, to take all
necessary and appropriate action to cause the Merger to become effective as soon
as reasonably practicable after such acquisition, without a meeting of the
Company's stockholders, in accordance with Section 253 of the DGCL.
4.06 Reasonable Efforts. Subject to the terms and conditions
provided herein, each of the Company, Parent and Sub shall, and the Company
shall cause each of its subsidiaries to, cooperate and use their respective
reasonable efforts to (a) take, or cause to
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be taken, all appropriate action, to do and cause to be done all things
reasonably necessary, proper and advisable and to make, or cause to be made, all
filings necessary, proper or advisable under applicable laws and regulations to
consummate and make effective the transactions contemplated by this Agreement,
including, without limitation, their respective reasonable efforts to obtain, as
promptly as practicable and prior to the Closing Date, all licenses, permits,
consents, approvals, authorizations, qualifications and orders of governmental
authorities, regulatory organizations, and other instrumentalities and agencies
and other third parties to contracts with the Company and its subsidiaries as
are necessary in connection with the authorization, execution and delivery of
this Agreement and the consummation of the transactions contemplated by this
Agreement and to fulfill the conditions to the Offer and the Merger and (b) as
promptly as practicable, make, or cause to be made, all filings and other
submissions necessary, proper or advisable with respect to this Agreement the
transactions contemplated hereby under (x) the HSR Act and any related
governmental request thereunder and (y) any other applicable laws or
regulations; provided, however, that no loan agreement or contract for borrowed
money shall be repaid except as currently required by its terms, in whole or in
part, and no contract shall be amended to increase the amount payable thereunder
or otherwise to be more burdensome to the Company or any of its subsidiaries in
order to obtain any such consent, approval or authorization without the written
consent of Sub. The Company, Parent and Sub shall cooperate with each other in
connection with the making of all such filings, including providing copies of
all such documents to the non-filing party and its advisors prior to filing and,
if requested, to accept all reasonable additions, deletions or changes suggested
in connection therewith. The Company, Parent and Sub shall use their respective
reasonable best efforts to furnish to each other all information required for
any application or other filing to be made pursuant to the rules and regulations
of any applicable law in connection with the transactions contemplated by this
Agreement.
4.07 No Solicitation of Other Offers. (a) The Company and its
affiliates and each of their respective officers, directors, employees,
representatives, consultants, investment bankers, attorneys, accountants and
other agents ("Agents") shall immediately cease any existing discussions or
negotiations with any other parties that may be ongoing with respect to any
Acquisition Proposal (as defined below). Neither the Company nor any of its
subsidiaries shall, directly or indirectly, take (and the Company shall not
authorize or permit its or its subsidiaries' Agents to take) any action to (i)
encourage, solicit or initiate the making of any Acquisition Proposal, (ii)
enter into any agreement with respect to any Acquisition Proposal or (iii)
participate in any way in discussions or negotiations with or furnish or
disclose any information to, any Person (other than Parent or Sub) in connection
with, or take any other action to knowingly facilitate any inquiries or the
making of any proposal that constitutes, or may reasonably be expected to lead
to, any Acquisition Proposal, except that, the Company may participate in
discussions or negotiations with and, provided such Person enters into a
confidentiality agreement with the Company on terms no more favorable to such
Person than the confidentiality agreement between Technicolor Videocassette
Inc., a wholly owned subsidiary of Parent, and the Company, furnish or
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disclose information to, any Person who has made, in the good faith judgment of
the Board of Directors of the Company after consultation with their financial
advisors, a bona fide offer or proposal (but not an inquiry) regarding a
transaction that would constitute an Acquisition Proposal and that, if agreed
with the Company, would constitute a Superior Proposal, provided such
Acquisition Proposal was not initially solicited, encouraged or knowingly
facilitated by the Company, its subsidiaries or their Agents in violation of
this Agreement after the date hereof, and, provided further, that nothing in
this Section 4.07 shall prevent the Company or Board of Directors from taking
and disclosing to the Company's stockholders a position contemplated by Rule
14d-9 and Rule 14e-2 promulgated under the Exchange Act with respect to any
tender offer or from making such disclosure to the Company's stockholders, upon
the advice of its independent outside legal counsel, as is required under
applicable Federal Securities law. Any actions permitted under, and taken in
compliance with, this Section 4.07 shall not be deemed a breach of any other
covenant or agreement of such party contained in this Agreement.
"Acquisition Proposal" shall mean any inquiry, proposal or
offer from any Person or group relating to any direct or indirect acquisition or
purchase of a substantial amount of assets of the Company or any of its
subsidiaries or of all or any portion of any class of equity securities of the
Company or any of its subsidiaries, any tender offer or exchange offer that if
consummated would result in any person beneficially owning all or any portion of
any class of equity securities of the Company or any of its subsidiaries, any
merger, consolidation, business combination, sale of substantially all the
assets, recapitalization, liquidation, dissolution or any transaction having
similar economic effect involving the Company or any of its subsidiaries, other
than the transactions contemplated by this Agreement. "Superior Proposal" shall
mean a bona fide proposal made by a third party to acquire all or a portion of
the outstanding shares of the Company pursuant to a tender offer, a merger or a
sale of all of the assets of the Company (x) on terms which the Board of
Directors of the Company determines in their good faith reasonable judgment
(after consultation with its independent outside financial and legal advisors)
to be more favorable to the Company and its stockholders than the transactions
contemplated hereby.
(b) Except to the extent that, after consultation with independent
outside counsel to the Company, the Board of Directors determines in good faith
that such actions are required in order for the directors of the Company to
satisfy their fiduciary duties to the Company and its stockholders or to comply
with Rule 14d-9 and Rule 14e-2 promulgated under the Exchange Act, the Board of
Directors shall not take any action to withdraw or modify in a manner adverse to
Parent or Sub, or take a public position inconsistent with, its approvals or
recommendation of the Offer, the Merger or this Agreement or to recommend
another Acquisition Proposal and shall not resolve to do any of the foregoing.
(c) In addition to the obligations of the Company set forth in
paragraph (a) above, on the date of receipt thereof, the Company shall advise
Parent of any request for information regarding or that may be reasonably likely
to result in, or any other inquiry or proposal
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relating to an Acquisition Proposal, the material terms and conditions of such
request, inquiry or proposal and of any subsequent material amendments or
changes thereto, and the identity of the Person making any such request, inquiry
or proposal.
(d) Immediately following the execution of this Agreement, the Company
will request each Person which has heretofore executed a confidentiality
agreement in connection with its consideration of making an Acquisition Proposal
with respect to the Company to return and/or destroy all confidential
information heretofore furnished to such Person by or on behalf of the Company.
4.08 Notification of Certain Matters. The Company shall give
prompt notice to Sub and Parent, and Parent and Sub shall give prompt notice to
the Company, of (a) the occurrence, or failure to occur, of any event, which
occurrence or failure to occur has caused or would be reasonably likely cause
(i) any representation or warranty contained in the Agreement to be untrue in
any material respect or (ii) any of the Tender Offer Conditions to be
unsatisfied, (b) any notice of, or other communication relating to, a default or
event that, with notice or lapse of time or both, would become a default,
received by the Company or any of its subsidiaries under any material contract
to which the Company or any of its subsidiaries is a party or under which any of
their respective assets or properties is bound, or (c) any event, change in
circumstances or other occurrence that has or would be reasonably likely to have
a material adverse effect on the Condition of the Company and its subsidiaries
taken as a whole. Each of the Company on the one hand and Sub and Parent on the
other shall give prompt notice to the other party of any notice or other
communication from any third party alleging that the consent of such third party
is or may be required in connection with the transactions contemplated by this
Agreement.
4.09 HSR Act. The Company and Parent shall, as soon as
practicable and in any event within ten days from the date of this Agreement,
file Notification and Report Forms under the HSR Act with the Federal Trade
Commission (the "FTC") and the Antitrust Division of the Department of Justice
(the "Antitrust Division") and shall use their reasonable efforts to respond as
promptly as practicable to all inquiries received from the FTC or the Antitrust
Division for additional information or documentation.
4.10 Employee Benefits. (a) From and after the Effective Time
until the first anniversary of the Effective Time, the Surviving Corporation
shall (or, if necessary, Parent shall cause the Surviving Corporation to) ensure
that all employees and officers of the Company at the Effective Time receive
benefits in the aggregate substantially comparable to the benefits received by
such individuals under US Employee Benefit Plans and Foreign Employee Benefit
Plans immediately prior to the date hereof. Notwithstanding the foregoing,
following the Effective Time, the Surviving Corporation may terminate the
employment of any employee (subject to the payment of severance benefits payable
to the employee in connection with such termination).
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(b) From and after the Effective Time until the first
anniversary of the Effective Time, the Surviving Corporation shall (or, if
necessary, Parent shall cause the Surviving Corporation to) keep in effect all
severance policies that are applicable to employees and officers of the Company
immediately prior to the date hereof.
(c) Following the Effective Time, (i) the Surviving
Corporation shall (or, if necessary, Parent shall cause the Surviving
Corporation to) ensure that no medical, dental, health or disability plan
adopted by the Surviving Corporation shall have any preexisting condition
limitations and (ii) the Surviving Corporation shall (or, if necessary, Parent
shall cause the Surviving Corporation to) honor all deductibles and
out-of-pocket expenses paid by the employees and officers of the Company and its
U.S. subsidiaries under any medical, dental, health or disability plan of the
Company and its subsidiaries during the portion of the calendar year prior to
the time such employees become eligible to participate in any medical, dental,
health or disability plan adopted by the Surviving Corporation.
(d) Following the Effective Time, for purposes of eligibility
and vesting, the Surviving Corporation (and, if applicable, Parent) shall honor
all service credit accrued by the employees and officers of the Company under
all US Employee Benefit Plans and Foreign Employee Benefit Plans up to (and
including) the Effective Time.
4.11 Directors' and Officers' Insurance; Indemnification. (a)
From and after the Effective Time, the Surviving Corporation shall (or, if
necessary, Parent shall take all necessary action to) ensure that the
Certificate of Incorporation and the By-Laws of the Surviving Corporation shall
contain the provisions with respect to indemnification and exculpation from
liability set forth in the Company's Certificate of Incorporation and By-Laws on
the date of this Agreement, which provisions shall not be amended, repealed or
otherwise modified for a period of six years from the Effective Time in any
manner that would adversely affect the rights thereunder of individuals who on
or prior to the Effective Time were directors, officers, employees or agents of
the Company, unless such modification is required by law.
(b) For six years from the Effective Time, the Surviving
Corporation shall either (x) maintain in effect the Company's current directors'
and officers' liability insurance covering those persons who are currently
covered on the date of this Agreement by the Company's directors' and officers'
liability insurance policy (a copy of which has been heretofore delivered to
Parent) (the "Indemnified Parties"); provided that the Surviving Corporation may
substitute for such Company policies, policies with at least the same coverage
containing terms and conditions which are no less advantageous and provided that
said substitution does not result in any gaps or lapses in coverage with respect
to matters occurring prior to the Effective Time or (y) cause the Parent's,
directors' and officers' liability insurance then in effect to cover those
persons who are covered on the date of this Agreement by the Company's
directors' and officers' liability insurance policy with respect to those
matters covered by the Company's directors' and officers' liability policy;
provided
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that the coverage provided by Parent's insurance shall be no less favorable to
the Indemnified Parties and shall provide no fewer rights than the Company's
directors' and officers' liability insurance policy currently in place.
Notwithstanding anything to the contrary in this Section 4.11, in no event shall
the Surviving Corporation be required to expend in any one year an amount in
excess of 200% of the annual premiums paid by the Company as of the date of this
Agreement for such insurance and if the annual premium for the insurance
coverage that would otherwise be required pursuant to this Section 4.11 would
exceed such amount, the Surviving Corporation shall only be obligated to obtain
a policy with the greatest coverage available for a cost not exceeding 200% of
the annual premiums currently paid by the Company.
4.12 Guaranty of Performance. If Sub fails to perform any of
its obligations under this Agreement, Parent shall, or shall cause another of
its affiliates to, perform such obligations.
4.13 Financing. Parent shall provide Sub with the funds
necessary to consummate the Offer, the Merger and the other transactions
contemplated hereby.
ARTICLE V
CONDITIONS PRECEDENT TO MERGER
5.01 Conditions Precedent to Obligations of Parent, Sub and
the Company. The respective obligations of Parent and Sub, on the one hand, and
the Company, on the other hand, to effect the Merger are subject to the
satisfaction or waiver (subject to applicable law) at or prior to the Effective
Time of each of the following conditions:
(a) Approval of Company's Stockholders. To the extent required
by applicable law, this Agreement and the Merger shall have been
approved and adopted by holders of a majority of the outstanding shares
of the Common Stock of the Company entitled to vote in accordance with
applicable law (if required by applicable law) and the Company's
Certificate of Incorporation and By-Laws;
(b) HSR Act. Any waiting period (and any extension thereof)
under the HSR Act applicable to the Merger shall have expired or been
terminated;
(c) Injunction. No preliminary or permanent injunction or
other order shall have been issued by any court or by any governmental
or regulatory agency, body or authority which prohibits the
consummation of the Offer or the Merger and the transactions
contemplated by this Agreement and which is in effect at the Effective
Time, provided, however, that, in the case of a decree, injunction or
other order, each of the parties shall have used reasonable best
efforts to prevent the entry
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of any such injunction or other order and to appeal as promptly as
possible any decree, injunction or other order that may be entered;
(d) Statutes. No statute, rule, regulation, executive order,
decree or order of any kind shall have been enacted, entered,
promulgated or enforced by any court or governmental authority which
prohibits the consummation of the Offer or the Merger or has the effect
of making the purchase of the Common Stock illegal; and
(e) Payment for Common Stock. Sub shall have accepted for
payment and paid for a number of shares of Common Stock tendered
pursuant to the Offer that satisfies the Minimum Condition; provided
that the foregoing shall not be a condition to Parent's and Sub's
obligation to consummate the Merger if Sub's failure to purchase any
shares of Common Stock violates the terms of the Offer.
ARTICLE VI
TERMINATION AND ABANDONMENT
6.01 Termination. This Agreement may be terminated and the
transactions contemplated hereby may be abandoned, at any time prior to the
Effective Time, whether before or after approval of the Merger by the Company's
stockholders:
(a) by mutual consent of the Company, on the one hand,
and of Parent and Sub, on the other hand;
(b) by either Parent and Sub, on the one hand, or the Company,
on the other hand, if any governmental or regulatory agency shall have
issued an order, decree or ruling or taken any other action permanently
enjoining, restraining or otherwise prohibiting the acceptance for
payment of, or payment for, shares of Common Stock pursuant to the
Offer or the Merger and such order, decree or ruling or other action
shall have become final and nonappealable;
(c) by Parent and Sub, on the one hand, or the Company, on the
other hand, if the Effective Time shall not have occurred on or prior
to September 30, 1998 (the "Outside Date"), unless the Effective Time
shall not have occurred on or prior to the Outside Date because of a
material breach of any representation, warranty, obligation, covenant,
agreement or condition set forth in this Agreement on the part of the
party seeking to terminate this Agreement;
(d) by Parent and Sub, if the Offer is terminated or expires
in accordance with its terms without Sub having purchased any Common
Stock thereunder due to
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an event or occurrence which would result in a failure to satisfy any
of the conditions set forth on Exhibit A hereto, unless any such
failure shall have been caused by or resulted from the failure of
Parent or Sub to perform in a material respect any covenant or
agreement of either of them contained in this Agreement or the breach
by Parent or Sub in a material respect of any representation or
warranty of either of them contained in this Agreement;
(e) by Parent and Sub, in the event that (A) (i) any one or
more representations, warranties, covenants or agreements of the
Company contained in this Agreement that is qualified as to materiality
shall be untrue, incorrect or breached in any respect except for such
failures as would not be reasonably likely to have a material adverse
effect on the Condition of the Company and its subsidiaries taken as a
whole or (ii) any one or more of such representations, warranties,
covenants or agreements that is not so qualified shall be untrue
incorrect or breached in any material respect which, individually or in
the aggregate, would be reasonably likely to have a material adverse
effect on the Condition of the Company and its subsidiaries taken as a
whole and, (B) in each case, cannot or has not been cured prior to the
earlier of (i) 15 days after the giving of written notice of such
breach to the Company and (ii) two business days prior to the date on
which the Offer expires;
(f) by the Company, if the Board of Directors of the Company
determines that an Acquisition Proposal constitutes a Superior Proposal
and the Board of Directors determines after consulting with independent
outside counsel that a failure to terminate this Agreement and enter
into an agreement to effect the Superior Proposal would constitute a
breach of its fiduciary duties; provided, however, that the Company
shall not be permitted to terminate this Agreement pursuant to this
Section 6.01(f) unless it has provided Parent and Sub with two business
days prior written notice of its intent to so terminate this Agreement
together with a reasonably detailed summary of the terms and conditions
of such Superior Proposal; provided, further, that Parent shall receive
the fees set forth in Section 7.01(b) immediately prior to any
termination pursuant to this Section 6.01(f) by wire transfer in same
day funds;
(g) by Parent and Sub, if (i) the Company or any of its
subsidiaries or their Agents encourages, solicits or initiates the
making of any Acquisition Proposal from any Person other than Parent or
Sub or the Company or any of its subsidiaries or their Agents takes any
other action to knowingly facilitate any inquiries or the making of any
proposal that constitutes, or may reasonably be expected to lead to,
any Acquisition Proposal (other than as permitted by and taken in
compliance with Section 4.07), (ii) the Company enters into any
agreement with respect to or the making of an Acquisition Proposal or
(iii) if the Company's Board of Directors shall have (A) failed to
recommend to the Company's stockholders that such stockholders tender
their shares of Common Stock pursuant to the Offer and vote to approve
and
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adopt this Agreement or (B) amended, withdrawn or modified such
recommendation in a manner adverse to Parent and Sub.
(h) by the Company, in the event that (A) (i) any one or more
representations, warranties, covenants or agreements of Parent or Sub
contained in this Agreement that is qualified as to materiality shall
be untrue, incorrect or breached in any respect except where such
failures as are not reasonably likely to materially and adversely
affect Parent's or Sub's ability to complete the Offer or Merger or
(ii) any one or more of such representations, warranties, covenants or
agreements that is not so qualified shall be untrue, incorrect or
breached which, individually or in the aggregate would be reasonably
likely to materially and adversely effect Parent's or Sub's ability to
complete the Offer or the Merger and (B) in each case cannot or has not
been cured prior to the earlier of (i) 15 days after the giving of
written notice of such breach to the Parent and Sub and (ii), to the
extent applicable, two business days prior to the date on which the
Offer expires.
(i) by the Company, if Parent or Sub shall have (i) failed to
commence the Offer within 5 business days following the date of this
Agreement, (ii) terminated the Offer or (iii) failed to pay for shares
of Common Stock pursuant to the Offer on or prior to the earlier of (x)
the fifth day after any shares of Common Stock tendered in the Offer
have been accepted for payment and (y) the Outside Date, unless in the
case (i) or (ii) such failure shall have been caused by or resulted
from the failure of the Company to satisfy the Tender Offer Conditions
set forth in Annex A or a material breach by the Company of any of its
representations, warranties, covenants or agreements set forth in this
Agreement.
6.02 Effect of Termination. In the event of the termination of
this Agreement pursuant to Section 6.01 hereof by Parent or Sub, on the one
hand, or the Company, on the other hand, written notice thereof shall forthwith
be given to the other party or parties specifying the provision hereof pursuant
to which such termination is made, and this Agreement shall become void and have
no effect, and there shall be no liability hereunder on the part of Parent, Sub
or the Company, except that Sections 4.02, 7.01 and this Section 6.02 hereof
shall survive any termination of this Agreement and Section 4.03(b)(xiv) of this
Agreement shall survive termination of this Agreement until the thirtieth day
following the expiration, termination or withdrawal of (without recommencement
or amendment or the execution of any agreement with the Company or any one or
more Selling Stockholders relating to) any Acquisition Proposal made by any
Person prior to the expiration or termination of the Offer. Nothing in this
Section 6.02 shall relieve any party to this Agreement of liability for breach
of this Agreement.
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ARTICLE VII
MISCELLANEOUS
7.01 Fees and Expenses. (a) Except as provided in paragraph
(b) below, all costs and expenses incurred in connection with this Agreement and
the consummation of the transactions contemplated hereby shall be paid by the
party incurring such costs and expenses.
(b) If (w) (i) the Offer shall have remained open for a
minimum of at least 20 business days, (ii) after the date hereof and prior to
December 31, 1998 any Person (other than Parent or Sub) shall have become the
beneficial owner of 50% or more of the outstanding shares of Common Stock and
(iii) the Minimum Condition (as defined in Annex A) shall not have been
satisfied and the Offer is terminated without the purchase of any Shares
thereunder, or (x) Parent and Sub shall have terminated this Agreement pursuant
to Section 6.01(g), or (y) the Company shall have terminated this Agreement
pursuant to Section 6.01(f), then the Company, if requested by Purchaser, shall
promptly, but in no event later than two days after the date of such request,
pay Parent up to $2,000,000 to reimburse Purchaser for the documented fees and
expenses of Parent, Purchaser and Merger Sub related to this Agreement, the
transactions contemplated hereby and any related financing and an additional fee
of $8,000,000, which amounts shall be immediately payable by wire transfer in
same day funds; provided, however, that if the Company shall have terminated
this Agreement pursuant to Section 6.01(f), such amounts shall be paid in
accordance with the provisions of such section. The Company acknowledges that
the agreements contained in this Section 7.01(b) are an integral part of the
transactions contemplated in this Agreement, and that, without these agreements,
Parent and Sub would not enter into this Agreement; accordingly, if the Company
fails to promptly pay the amounts due pursuant to this Section 7.01(b) or
Section 6.01(f), and, in order to obtain such payments, Parent or Sub commences
a suit which results in a judgment against the Company for the fees set forth in
this paragraph (b), the Company shall pay to Parent and Sub its reasonably
documented costs and expenses (including reasonably documented attorneys' fees
and expenses) in connection with such suit, together with interest on the amount
of the fee at a rate equal to two percentage points over the prime rate of the
Morgan Guaranty Trust Company of New York on the date such payment was required
to be made.
7.02 Representations and Warranties. The respective
representations and warranties of the Company, on the one hand, and Parent and
Sub, on the other hand, contained herein or in any certificates or other
documents delivered prior to or at the Closing shall not be deemed waived or
otherwise affected by any investigation made by any party. Each and every such
representation and warranty shall expire with, and be terminated and
extinguished by, the Closing and thereafter none of the Company, Parent or Sub
shall be under any liability whatsoever with respect to any such representation
or warranty. This Section 7.02 shall have no effect upon any other obligation of
the parties hereto, whether to
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be performed before or after the Effective Time.
7.03 Extension; Waiver. At any time prior to the Effective
Time, the parties hereto, by action taken by or on behalf of the respective
Boards of Directors of the Company, Parent or Sub, may (i) extend the time for
the performance of any of the obligations or other acts of the other parties
hereto, (ii) waive any inaccuracies in the representations and warranties
contained herein by any other applicable party or in any document, certificate
or writing delivered pursuant hereto by any other applicable party or (iii)
waive compliance with any of the agreements or conditions contained herein. Any
agreement on the part of any party to any such extension or waiver shall be
valid only if set forth in an instrument in writing signed on behalf of such
party.
7.04 Public Announcements. The Company, on the one hand, and
Parent and Sub, on the other hand, agree to consult promptly with each other
prior to issuing any press release or otherwise making any public statement with
respect to the transactions contemplated hereby, and, unless required by
applicable law or regulation or the rules and regulations of any stock exchange
on which any of their securities are traded, shall not issue any such press
release or make any such public statement prior to such consultation and review
by the other party of a copy of such release or statement.
7.05 Notices. All notices, requests, demands, waivers and
other communications required or permitted to be given under this Agreement
shall be in writing and shall be deemed to have been duly given if delivered in
person or mailed, certified or registered mail with postage prepaid, or sent by
telex, telegram or telecopier, as follows:
(a) if to the Company, to it at:
Nimbus CD International Inc.
623 Welsh Run Road, Guildford Farm
Ruckersville, Virginia 22968
Attention: L. Steven Minkel
with a copy to:
White & Case LLP
1155 Avenue of the Americas
New York, New York 10036
Attention: William F. Wynne, Jr.
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(b) if to Parent, to it at:
Carlton Communications Plc
25 Knightsbridge
London SW1X 7RZ England
Attention: David Abdoo
with a copy to:
Sullivan & Cromwell
125 Broad Street
New York, New York 10004
Attention: David M. Kies
(c) if to Sub, to it at:
Neptune Acquisition Corp.
3233 East Mission Oaks Blvd.
Camarillo, California 93012
Attention: Thomas Collins
with a copy to:
Sullivan & Cromwell
125 Broad Street
New York, New York 10004
Attention: David M. Kies
or to such other Person or address as any party shall specify by notice in
writing to each of the other parties. All such notices, requests, demands,
waivers and communications shall be deemed to have been received on the date of
delivery unless if mailed, in which case on the third business day after the
mailing thereof except for a notice of a change of address, which shall be
effective only upon receipt thereof.
7.06 Entire Agreement. This Agreement and the annex, schedules
and other documents referred to herein or delivered pursuant hereto,
collectively contain the entire understanding of the parties hereto with respect
to the subject matter contained herein and supersede all prior agreements and
understandings, oral and written, with respect thereto.
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7.07 Binding Effect; Benefit; Assignment. This Agreement shall
inure to the benefit of and be binding upon the parties hereto and, with respect
to the provisions of Section 4.11 hereof, shall inure to the benefit of the
Persons benefiting from the provisions thereof who are specifically intended to
be third party beneficiaries thereof, and, in each such case, their respective
successors and permitted assigns, but neither this Agreement nor any of the
rights, interests or obligations hereunder shall be assigned by any of the
parties hereto without the prior written consent of the other parties.
Notwithstanding anything in this Section 7.07 to the contrary, it is expressly
understood that Parent and Sub may assign their respective rights, interests and
obligations under this Agreement to any of their affiliates provided that such
assignment shall not relieve Parent or Sub, as the case may be, from their
obligations pursuant to this Agreement. Except as set forth above, nothing in
this Agreement, expressed or implied, is intended to confer on any Person other
than the parties hereto or their respective successors and permitted assigns,
any rights, remedies, obligations or liabilities under or by reason of this
Agreement.
7.08 Amendment and Modification. Subject to applicable law,
this Agreement may be amended, modified and supplemented in writing by the
parties hereto in any and all respects before the Effective Time
(notwithstanding any stockholder approval), by action taken by the respective
Boards of Directors of Parent, Sub and the Company or by the respective officers
authorized by such Boards of Directors; provided, however, that after any such
stockholder approval, no amendment shall be made which by law requires further
approval by such stockholders without such further approval.
7.09 Further Actions. Each of the parties hereto agrees that,
subject to the terms of this Agreement and its obligations under applicable Law,
it will use its reasonable best efforts to fulfill all conditions precedent
specified herein, to the extent that such conditions are within its control, and
to do all things reasonably necessary to consummate the transactions
contemplated hereby.
7.10 Headings. The descriptive headings of the several
Articles and Sections of this Agreement are inserted for convenience only, do
not constitute a part of this Agreement and shall not affect in any way the
meaning or interpretation of this Agreement.
7.11 Counterparts. This Agreement may be executed in several
counterparts, each of which shall be deemed to be an original, and all of which
together shall be deemed to be one and the same instrument.
7.12 Applicable Law; Jurisdiction. This Agreement and the
legal relations between the parties hereto shall be governed by and construed in
accordance with the laws of the State of Delaware, without regard to the
conflict of laws rules thereof. Each party hereby irrevocably submits to the
exclusive jurisdiction of the United States District Court for the Southern
District of New York or any court of the State of New York located in the City
of New York in any action, suit or proceeding arising in connection with this
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Agreement, and agrees that any such action, suit or proceeding shall be brought
only in such court (and waives any objection based on forum non conveniens or
any other objection to venue therein); provided, however, that such consent to
jurisdiction is solely for the purpose referred to in this Section 7.12 and
shall not be deemed to be a general submission to the jurisdiction of said
Courts or in the State of New York other than for such purposes. EACH PARTY
HERETO HEREBY WAIVES ANY RIGHT TO A TRIAL BY JURY IN CONNECTION WITH ANY SUCH
ACTION, SUIT OR PROCEEDING.
7.13 Severability. If any term, provision, covenant or
restriction contained in this Agreement is held by a court of competent
jurisdiction or other authority to be invalid, void, unenforceable or against
its regulatory policy, the remainder of the terms, provisions, covenants and
restrictions contained in this Agreement shall remain in full force and effect
and shall in no way be affected, impaired or invalidated.
7.14 Certain Definitions. "Person" shall mean and include an
individual, a partnership, a joint venture, a corporation, a trust, an
unincorporated organization, a group and a government or other department or
agency thereof.
(b) "subsidiary" with respect to the Company, shall mean and
include (x) any partnership of which the Company or any subsidiary is a general
partner or (y) any corporation or other organization whether incorporated or
unincorporated of which at least a majority of the securities or interests
having by the terms thereof ordinary voting power to elect at least a majority
of the board of directors or others performing similar functions with respect to
such corporation or other organization is directly or indirectly owned or
controlled by such party or by any one or more of its subsidiaries, or by such
party and one or more of its subsidiaries.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, each of Parent, Sub and the Company has caused this
Agreement to be executed by its respective officers thereunto duly authorized,
all as of the date first above written.
CARLTON COMMUNICATIONS PLC
By___________________________
Name: B.A. Cragg
Title: Finance Director
NEPTUNE ACQUISITION CORP.
By___________________________
Name: O.F. Raimondo
Title: President
NIMBUS CD INTERNATIONAL, INC.
By___________________________
Name: L.J. Faulkner
Title: President and Chief Executive Officer
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ANNEX A
The capitalized terms used in this Annex A shall have the
meanings set forth in the Agreement to which it is annexed, except that the term
"Merger Agreement" shall be deemed to refer to the Agreement to which this Annex
A is appended and "Purchaser" shall be deemed to refer to Sub.
Notwithstanding any other provision of the Offer or the Merger
Agreement, Purchaser shall not be required to accept for payment or subject to
any applicable rules and regulations of the Commission, including Rule 14e-1c
under the Exchange Act, pay for any shares of Common Stock tendered pursuant to
the Offer and may terminate or amend the Offer and may postpone the acceptance
of, and payment for, shares of Common Stock, if (i) there shall not have been
validly tendered and not withdrawn prior to the expiration of the Offer a number
of shares of Common Stock which represent a majority of the total voting power
of all shares of capital stock of the Company outstanding on a fully diluted
basis (the "Minimum Condition"), (ii) any applicable waiting period under the
HSR Act shall not have expired or been terminated, or (iii) if, at any time on
or after the date of the Merger Agreement and at or before the time of payment
for any such shares of Common Stock (whether or not any shares of Common Stock
have theretofore been accepted for payment or paid for pursuant to the Offer)
any of the following shall occur:
(a) there shall be instituted or pending any action or
proceeding by any government or governmental authority or agency,
domestic or foreign, or by any other Person, domestic or foreign,
before any court or governmental authority or agency, domestic or
foreign, (i) challenging or seeking to or which would be reasonably
likely to make illegal, impede, delay or otherwise directly or
indirectly restrain or prohibit the Offer or the Merger or seeking to
obtain material damages, (ii) seeking to compel Parent or Purchaser to
dispose of, or hold separate (through the establishment of a trust or
otherwise) material assets or properties or categories of assets or
properties or businesses of Parent, the Company or any of their
subsidiaries or to withdraw from one or more lines of business material
to the Condition of Parent, the Company or any of their subsidiaries or
to take any actions that, in the aggregate would be reasonably likely
to materially impair Parent's ability to control, direct or manage on a
day-to-day basis the business or affairs of the Company, (iii) seeking
to impose limitations on the ability of Parent or Purchaser effectively
to exercise full rights of ownership of the shares of Common Stock,
including, without limitation, the right to vote any shares of Common
Stock acquired or owned by Sub or Parent on all matters properly
presented to the Company's stockholders, (iv) seeking to require
divestiture by Parent or Purchaser of any shares of Common Stock or (v)
materially adversely affecting the Condition of the Company and its
subsidiaries taken as a whole;
(b) there shall be any action taken, or any statute, rule,
regulation, legislation, interpretation, judgment, order or injunction
proposed, enacted, enforced, promulgated, amended, issued or deemed
applicable to (i) Parent, Purchaser, the
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<PAGE>
Company or any subsidiary of the Company or (ii) the Offer or the
Merger, by any legislative body, court, government or governmental,
administrative or regulatory authority or agency, domestic or foreign,
other than the routine application of the waiting period provisions of
the HSR Act to the Offer or to the Merger, which would directly or
indirectly, result in any of the consequences referred to in clauses
(i) through (v) of paragraph (a) above;
(c) any change shall have occurred (or any condition, event or
development shall have occurred), that would have a material adverse
effect on the Condition of the Company and its subsidiaries taken as a
whole;
(d) except as to any such representation or warranty which
speaks as of a specific date or for a specific period which must be
true and correct in the following respects only as of such specific
date or period, as of the date of the Merger Agreement and as of the
scheduled expiration date the Offer (i) any one or more
representations, warranties, covenants or agreements of the Company
contained in the Merger Agreement that is qualified as to materiality
shall be untrue, incorrect or breached in any respect except for such
failures as would not be reasonably likely to have a material adverse
effect on the Condition of the Company and its subsidiaries taken as a
whole or (ii) any one or more of such representations, warranties,
covenants or agreements that is not so qualified shall be untrue
incorrect or breached in any material respect which, individually or in
the aggregate, would be reasonably likely to have a material adverse
effect on the Condition of the Company and its subsidiaries taken as a
whole;
(e) (i) the Company or any of its subsidiaries or their Agents
encourages, solicits or initiates the making of any Acquisition
Proposal from any Person other than Parent or Sub or the Company or any
of its subsidiaries or their Agents takes any other action to knowingly
facilitate any inquiries or the making of any proposal that
constitutes, or may reasonably be expected to lead to, any Acquisition
Proposal other than as permitted by and in compliance with Section
4.07, (ii) the Company enters into any agreement with respect to or the
making of an Acquisition Proposal, or (iii) if the Company's Board of
Directors shall have (A) failed to recommend to the Company's
stockholders that such stockholders tender their shares of Common Stock
pursuant to the Offer and vote to approve and adopt this Agreement or
(B) amends, withdraws or modifies such recommendation in a manner
adverse to Parent and Sub or resolves to do so.
(f) the Company shall have failed to perform in any material
respect any material obligation or to comply in any material respect
with any material agreement or material covenant of the Company to be
performed or complied with by it and its subsidiaries under the Merger
Agreement; or
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<PAGE>
(g) the Merger Agreement shall have been terminated in
accordance with its terms;
which, in the reasonable judgment of Purchaser, in any such case and regardless
of the circumstances giving rise to any such condition, makes it inadvisable to
proceed with such acceptance for payment or payment.
The foregoing conditions (including those set forth in clauses
(i)-(iii) above) are for the sole benefit of the Parent and the Purchaser and
may be asserted by the Parent or the Purchaser, or may be waived by the Parent
or the Purchaser, in whole or in part at any time and from time to time in its
sole discretion. The failure by the Parent or the Purchaser at any time to
exercise any of the foregoing rights shall not be deemed a waiver of any such
right and each such right shall be deemed an ongoing right which may be asserted
at any time and from time to time.
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<PAGE>
Exhibit 99(c)
FILING AGREEMENT
Pursuant to Rule 13d-1(f) promulgated under the Securities and Exchange Act
of 1934; the undersigned hereby agree to the filing of this Statement on
Schedule 13D, dated June 23, 1998 relating to shares of Common Stock, par value
$.01 per share, of Nimbus CD International, Inc.
This Agreement may be executed in any number of counterparts, each of which
shall be deemed an original, but all of which shall constitute one and the same
instrument.
Dated: June 23, 1998 CARLTON COMMUNICATIONS PLC
By: /s/ David Abdoo
--------------------------------
Name: David Abdoo
Title: Company Secretary
NEPTUNE ACQUISITION CORP.
By: /s/ Thomas M. Collins, Jr.
--------------------------------
Name: Thomas M. Collins, Jr.
Title: Vice President and Secretary
